2 3
First Since its establishment as Korea’s first steelmaker in 1953,
Hyundai Steel Company has been at the forefront of the nation’s
steel industry.
Best Hyundai Steel Company has grown into a comprehensive global
steelmaker with a top-quality, globally competitive product
line-up.
Last The construction of Hyundai Steel Company’s Blast Furnace No.3
is in progress, and will enable us to create value that can
last.
le ad
in g
us t
o a
su st
ai na
bl e
fu tu
2010 2011 2012
Sales 10,235 15,260 14,146
Operating income margin 10.3% 8.4% 6.2%
Sales Volume (Unit: Thousand tons)
Long steel 7,400 7,581 7,357
Flat steel 4,645 8,700 8,981
Total 12,045 16,281 16,338
Q1 Q2 Q3 Q4
Operating income 156 324 227 164
% 4.4 8.4 6.7 5.0
% 5.1 5.5 7.8 8.2
% 4.3 4.8 6.8 6.7
*Consolidated, K-IFRS based
*Consolidated, K-IFRS based
Acquired CE-Mark certification for steel plates for pressure
equipment directive
Sales channels in overseas markets especially in Europe are
expected to scale up driven by the acquisition of the PED
certification for six steel plates besides P355NL2 from Lloyd’s
Register Quality Assurance(LRQA).
Held the cornerstone ceremony for fire bricks at coke plants of
Blast Furnace No.3 at the Dangjin Works
A cornerstone ceremony to wish for stable construction and
operation was held where writing was inscribed on fire bricks that
are the cornerstones for coke plants.
Installed the blast furnace shell tier10 of Blast Furnace
No.3
The last 10th row of Blast Furnace shell has been installed, and
the overall BF Proper is now completed. It symbolizes the
finalization of refractory installation and integration of all
facilities with Blast Furnace in their center.
Installed Continuous Ship Unloader (CSU) No.6
Continuous Ship Unloader (CSU) No.6 was installed on the wharf of
Hyundai Steel Company in Dangjin Port. The 2,650-ton machinery can
load/unload iron ore of 3,500 tons/hour and coal of 2,500
tons/hour
19 JANUARY 12 APRIL 10 JULY19 APRIL
Achieved cumulative production of 20 million tons of steel making
at Dangjin Works (BF No.1&2)
After the first heats on January 11, 2010, we have reached 20
million tons of cumulative production within 1,033 working days. We
have established clean steel making production system through
improving facility with operation.
Acquired three JIS certifications
Acquired three Japanese Industrial Standards (JIS) certifications
for hot rolled mild steel plate, sheet & strip for automobile
structures (JIS G3113), carbon steel for pipe & tubes (G3132),
and carbon steel for machine structural use (G4051)
Blast Furnace No.3 held the cornerstone ceremony for fire
bricks
We held a ceremony to wish for stable construction and operation by
inscribing words on fire bricks that protect a blast furnace body
from hot metal
Acquired a certification for energy management systems
(ISO50001)
We acquired the ISO50001, the international standard for energy
management systems from LRQA for our efforts to enhance energy
efficiency and continuously save energy.
07 NOVEMBER02 AUgUSt 26 NOVEMBER 20 DECEMBER
06
08 09
In 2012, the Hyundai Motor Group continued to grow and develop
despite the difficult business environment at home and abroad.
Hyundai Motor and Kia Motors have now together established a global
production system of 30 plants in 9 countries around the world.
This enabled the production and sale of 7.12 million units, up
approximately 8% over the previous year, further solidifying their
positions as global car makers.
Hyundai Steel Company has contributed significantly to enhance the
quality of completed cars by developing and supplying top-quality
steel sheets for automobiles. Once Blast Furnace No.3, currently
under construction, is completed, a blast furnace production system
of 12 million tons per year will be up and running.
2013, however, is expected to be more challenging both in Korea and
overseas, mainly due to the continuing financial crisis in Europe
and a wider global economic downturn.
Nevertheless, we have the potential for outstanding performance,
overcoming crises and hardships through an unparalleled spirit of
challenge and passion. In 2013, we will further strengthen our
fundamentals through qualitative growth and focus on
competitiveness for the future, which will enable us to overcome
these obstacles. To this end, we are committed to initiating
quality-driven brand innovation.
We will do our best to fulfill our role as a model corporate
citizen, contributing to the well-being of the public and the
development of the national economy. In line with this, we will
spearhead growth alongside our partner companies and offer our
hands to the underprivileged in these times of difficulty.
2013 will see us lay the foundations of new growth by completing
the construction of Blast Furnace No.3. We will make 2013 a year
when we leap higher towards being a top-tier global company,
achieving our dreams through change and innovation.
Hyundai Steel 2012 Annual Report Chairman’s Message
Mong-koo Chung Chairman
Hyundai Motor Group
10 11Hyundai Steel 2012 Annual Report Vice-Chairman’s Message
Dear valued shareholders and customers, I wish you good health and
happiness.
2012 was a continuum of unpredictability. Amidst the global
economic downturn resulting from the financial crisis in Europe,
the uncertainty of overall business circumstances continued.
Nevertheless, Hyundai Steel Company strived to develop new
materials and products, and successfully completed the development
of high-quality steel sheets for automobiles within three years of
the first operation of the blast furnace. We also tapped into new
demand by developing steel for offshore structures such as thick
H-beams with strong low-temperature impact resistance and steel
plates for ultra-low temperature, and high-strength
earthquake-resistant rebar and beams.
We improved the processes for making high-strength products, and
also reduced our use of high cost ferro-alloys by developing the
QST (quenching and self-tempering) technique. To raise the yield of
the metal content in slags and to cut electric power requirements,
we adopted dual doors for our electric arc furnaces. These measures
have added to our cost- competitiveness.
As a result of efforts such as these, we achieved 16.3 million tons
of sales volume, KRW 14,146 billion of financial sales and KRW 872
billion of operating income in 2012. No.3 Blast Furnace will be
completed in September this year. Currently 95% of the construction
has been completed, and it reaffirms the smooth process of its
work.
I would like to extend my profound gratitude to shareholders for
their unparalleled interest in our company and their encouragement
to us to be what we are now.
In 2013, with the completion of No.3 Blast Furnace, we will become
the only steelmaker with 12 million tons of production capacity in
blast furnaces and 12 million tons in electric arc furnaces. At the
same time, we plan to solidify our fundamentals and thus grow to
become a No.1 steelmaker in the world.
The business environment for steel, however, is expected to be even
gloomier this year as the global economic downturn continues, and
market competition at home and abroad will be ever fiercer due to
global over-supply of steel. The construction and shipbuilding
companies that are our main customers are failing to come out of an
abyss of sluggish growth, while growth in the auto sector is
expected to slow down.
Given the economic and industrial environment at home and abroad,
the steel market in 2013 is expected to see sluggish demand and
over-supply, resulting in low profitability. In particular,
over-supply in China and Japan will lead to a large inflow of low-
priced imports, further worsening the already fierce
competition.
We have, therefore, established the following management principles
to focus on overcoming the crisis and responding to change in order
to resolve the challenges to come.
Firstly, we will develop a 24 million-ton management system. The
successful completion of No.3 Blast Furnace and getting its
operation under way as early as possible will mean that we can
focus on creating synergy between the Integrated Steel Mill
operations and the electric arc furnaces. Moreover, we will equip
ourselves internally for strong external growth. We will strengthen
our human resources to build the technological prowess that will
allow us to lead the market through top-grade product quality and
services, and we will improve our management systems to maximize
efficiency.
Secondly, we will foster differentiated competitiveness. We cannot
win against our competitors if we are no different from them. We
will therefore develop new products and new types of steel to meet
customer needs, while finding practical ways to satisfy customers’
further needs by making sure that our business operations are
market-oriented, by giving ourselves a stronger competitive edge in
the non-pricing sector, and by looking for innovation in sales. We
will also strive to make ourselves be cost competitive by extending
the use of low-cost raw materials and the development of low-cost
processes.
Thirdly, our change response systems will be solidified. We will
improve our fundamentals, so that we can adapt to the changing
environment faster and more flexibly. We will promote company- wide
crisis management to constantly keep an eye on market changes, and
to pre-emptively explore and respond to risks at a corporate
level.
Based on these management principles, we have set targets of 16.7
million tons of product sales and KRW 13.4 trillion of revenues for
this year.
Distinguished shareholders and customers,
This year is a significant year for us – it marks Hyundai Steel
Company’s 60th anniversary and the completion of the grand history
of steel industry in Korea. For last 60 years, production in
electric arc furnaces led us to be a No.1 steel maker in Korea.
Furthermore we hope the next 60 years will be a period of hopes and
dreams by carrying out electric arc furnaces and blast furnaces
together and it will lead us to be No.1 steel maker in the world.
Road ahead of us could be challenging, but there is in no doubt
that our advances are for a better tomorrow, so we will never cease
as we show our belief in overcoming crisis and passion for
challenges.
I ask for your continuing support and encouragement and I wish you
and your family good health and happiness for this year.
Thank you.
12 13
Board of Directors
Hyundai Steel Company’s Board of Directors (BOD) consists of four
executive directors and five outside directors. With a wealth of
knowledge and experience in areas such as taxation, business
administration, environment, fair trade and law, the outside
directors provide the Company with operational and management
advice in relation to their fields of expertise. The BOD’s primary
focus is on promoting long- term shareholder value by ensuring the
Company’s commitment to transparent and sound management.
Audit Committee The Audit Committee is responsible for auditing the
Company’s businesses and property, reviewing the validity and
appropriateness of important changes to its accounting standards,
and appointing outside auditors.
Ethics Committee The Ethics Committee makes decisions regarding the
Company’s ethics management. Its goal is to enable the Company to
put into practice transparent management, and to develop an open
and honest corporate culture.
Outside Director Candidate Recommendation Committee The Committee
recommends candidates for outside directors.
Composition of Shareholders
The proportion of shares held by foreign shareholders has risen
slightly year-on-year as of December 31, 2012.
Hyundai Steel Company will maximize its corporate value through
sound corporate governance and transparent management. In addition,
we will fulfill our obligations to all our shareholders and create
the best value through responsible management, thereby growing into
a respected company.
Hyundai Steel 2012 Annual Report Corporate Governance
Treasury shares
Name Position
Executive Directors
Park Seung-ha Vice-Chairman & CEO, Hyundai Steel Company
Woo Yu-cheol President & CEO, Hyundai Steel Company
Outside Directors
Chon Hyong-soo Advisor to Kim & Chang law firm (Tax
Theory)
Oh Jeong-seok Professor at College of Business Administration,
Seoul National University (Business Administration)
Kim Seung-do Professor at Department of Environmental and Bio
Engineering, Hallym University (Environment)
Sung Nak-il Professor at School of Economics, University of Seoul
(Industrial Organization)
Chung Ho-yul Professor at Law School, Sungkyunkwan University
(Economic Law, Commercial Law)
Sub-Committees
The BOD operates several sub-committees to ensure an efficient
decision-making process.
(As of March 31, 2013)
Name Audit Committee
Executive Directors
Chung Mong-koo
Chung Eui-sun
Park Seung-ha
Woo Yu-cheol
Outside Directors
Chon Hyong-soo
Oh Jeong-seok
Kim Seung-do
Sung Nak-il
Chung Ho-yul
Chairman Member
14 15
group Vision
Hyundai Motor Group’s vision, ‘Together for a better future’,
embodies its determination to offer the highest levels of
satisfaction to customers. Under this vision, the Group continues
to grow in line with its status as a leading global group through
ultimate sense of responsibility for its customers, realization of
possibilities, and respect for humanity as a corporate
citizen.
Company Vision
Hyundai Steel Company’s vision is ‘Leading the new era of steel’.
We have set three strategies to fulfill this vision: maximizing
customer value, expanding networks around the world, and promoting
future growth strategy. Accordingly, we will strive to provide
sophisticated products and services, and to achieve global
competitiveness.
Synergy Creation
Hyundai Motor Group has designated steel, automobiles, and
construction as its three key growth engines. Hyundai Steel Company
plays an essential role in supplying steel products to the Group to
fuel those engines of growth.
Hot-rolled coils produced by Hyundai Steel Company become major
materials for the cars manufactured by Hyundai Motor and Kia
Motors, after it is processed by Hyundai Hysco. In addition, the
Company carries out joint research with Hyundai Motor, Kia Motors,
and Hyundai Hysco to develop new steel sheets for automobiles,
securing the very best in technology. We have thus jointly
succeeded in developing new steel sheets for mass production ahead
of their competitors.
Hyundai Steel Company supplies Hyundai E&C and Hyundai Amco
with rebar, beams, and heavy plate. This ensures that Hyundai
E&C and Hyundai Amco have a stable supply of high-quality steel
products, and that Hyundai Steel Company has a loyal customer. This
in turn helps to maximize the Group’s synergies.
Steel scrap generated in the car-making process and at construction
sites serves as raw material for the electric arc furnace division
of Hyundai Steel Company, which produces long steel. This
eco-friendly resource-circulation system benefits the entire
Group.
Strategy
As an eco-friendly and resource-circulation company, we will lead a
new era for the steel industry by providing high value-added
products and services,
and by achieving global competitiveness based on cooperation with
all our customers.
Vision Statement
Vision Slogan
• Promoting new businesses in eco-friendly steel
• Enhancing the execution of resource-circulation business
model
Promoting future growth strategy
• Expanding coordinative alliances
• Enhancing product portfolio
• Providing value-added services
• Improving marketing strategy
Maximizing customer value
Construction We build tomorrow
Electric Arc Furnace
Hyundai Motor Group aims to create ultimate value and promote
harmonious growth for all customers through eco-friendly management
and respect for mankind, with the focus on its management
philosophy of ‘creating a new future through innovative thinking
and pushing towards new frontiers’.
Hyundai Steel Company has been at the forefront of the steel
industry in Korea. We have grown into a leading global producer of
high value-added steel products, and we are now expanding our
business to meet the demands of a growing world.
Company Profile | Steel Mills | Key Products | Product Innovation |
Product Portfolio & Performance
1716
12 8
16,338 16,281
20 21
Company Overview
Launched under the name ‘Korea Heavy Industry Corporation’ in 1953,
Hyundai Steel Company was privatized in 1962, and became a member
of the Hyundai Group in 1978. In 2000, the Company seized the
initiative to restructure the Korean steel industry by merging with
Kangwon Industries and Sammi Steel, and moved on to achieve
expotential growth. The Company joined the Hyundai Motor Group in
2001, and then acquired the Dangjin plant from Hanbo Steel in 2004.
These steps turned the Company into the world’s leading electric
arc furnace steel producer with works in Incheon, Pohang, and
Dangjin.
The Company’s history of challenge, change and innovation also
brought about the development of a fully-integrated steel mill to
manufacture high-end products. It began building its first two
blast furnaces at the Dangjin Works in 2006, and completed them in
2010. Their annual capacity of four million tons each helped the
Company to create a high-quality flat steel supply system. The
third blast furnace is scheduled for completion in September 2013,
and with a production capacity of 12 million tons, the Company is
now evolving into a comprehensive global steelmaker.
Through this process of steady change and growth, the Company has
developed a balanced portfolio of electric arc furnaces and blast
furnaces. Hyundai Steel Company’s product portfol io includes long
and flat steel, and offers a top- quality, globally competitive
product line-up. We will offer leadership in creating a new era of
steel through change and innovation, making lives more prosperous
and convenient with higher quality steel.
Hyundai Steel 2012 Annual Report Lead the Growth
Company History
Commenced operation of the reinforcing bar mill
Merged with Kangwon Industries
Acquired Sammi Steel Company
Blow-in of Blast Furnace No.1
Manufactured first HRC products from the Blast Furnace
Manufactured first heavy plate product
Completed the construction of the integrated steel mill
Commenced operation of the C-HRC mill
Blow-in of Blast Furnace No.2
Hyundai Steel Company’s 60th Anniversary
Blow-in of Blast Furnace No.3
Commenced operation of the large H-beam mill
Renamed as Hyundai Steel Company
Commenced operation of the B-HRC mill
Held groundbreaking ceremony for the integrated steel mill
Acquired the assets of Hanbo Steel’s Dangjin plant
1953 19721953 20001978 1982 2004 2005 2006 2009 2010 2011
2013(E)2001
Incorporated into the Hyundai Group
Commenced commercial production at Blast Furnace No.2
Began the construction of Blast Furnace No.3
Commenced operation of the A-HRC mill
First arrival of raw materials at the integrated steel mill
Commenced operation of coke, sinter, and heavy plates plant
22 23
Incheon Works
The pioneer of Korea’s steel industry, the Incheon Works is
equipped with eco-friendly, high-efficiency facilities and the
world’s largest electric arc furnace plant. It boasts purification
equipment that brings in waste water and turns it into
industrial-grade water through an advanced water treatment process.
It also has an iron pier with two 50,000 ton berths, completed in
January 2007 at the North Incheon Port, leading to substantial
reductions in logistics costs.
Dangjin Works
The Dangjin works began to operate a blast furnace mill in 2010.
This was a ‘first’ among domestic private companies, allowing the
company to begin rewriting the history of Korean steel yet again.
The site is divided into an electric arc furnace area and a blast
furnace area. The former comprises a rebar mill which uses steel
scrap as its raw material, and the A-HRC mill. The latter consists
of Blast Furnaces No.1 and No.2, the B-HRC and C-HRC mills, and a
heavy plate mill. Blast Furnace No.3 is now under construction with
completion scheduled for September 2013.
Hyundai Steel Company operates global standard steel mills in
Incheon, Pohang and Dangjin. In particular, the Dangjin Works is
the first steel works owned by a private company in Korea to
operate a blast furnace steel mill, opening a new chapter in
Korea’s steel industry. The Company is now actively expanding into
wider customer base.
Hyundai Steel 2012 Annual Report Lead the Growth
Size 920,000 m2
Major products
H-beams, Section beams, Rebar, Steel casting products and ingots,
Stainless steel sheets
Size 7,400,000 m2
Major products Hot-rolled coil, Heavy plate, Rebar
Qingdao Works
The Qingdao Works, established in 1999, assembles and produces
components for track shoe assemblies. It ranked first in China’s
undercarriage market – a component for excavators – within two
years of its start, becoming a pioneer for the Company in the
Chinese market of potentials and opportunities.
Size 660,000 m2
Pohang Works
The Pohang Works manufactures a variety of steel products,
including H-beams, rebar, round bars, and heavy equipment. It was
the second steel plant in the world to succeed in developing
magnetic levitation train rails. It is also the only Korean
supplier of rapid transit railway rails. It leads the market for
high value-added steel products with its rolling rolls and track
shoe assemblies.
Size 660,000 m2
Production capacity 3.3 million tons
Major products H-beams, Rebar, Rails, Round bars, Rolls, Track shoe
assemblies
01 Incheon Works, a birthplace of Korea’s steel industry
02 Dangjin Works, an integrated steel mill achieving global
standards
03 Pohang Works, manufacturing a variety of steel products
04 Qingdao Works, a springboard to advance into the global
market
03 04
24 25
Reinforcing Bar
Rebar is produced at the Company’s Incheon, Pohang, and Dangjin
Works, and varies in size from D10mm to D57mm. It is widely used in
the construction of steel and concrete reinforcing structures,
nuclear power plants, and other buildings. We focus on developing
custom-tailored products that enable client companies to reduce
costs. In 2001, Hyundai Steel Company developed ‘Super-Bars’ with a
25% higher yield strength; these bars add to the amount of usable
space in buildings and skyscrapers, and also significantly reduce
construction costs.
H-Beams/Section Beams
Hyundai Steel Company produces various types and sizes of beams. We
were the first company in Korea to develop H-beams, and they are
one of our key products. Asymmetric H-beams, extra thickness/large-
size H-beams, high-strength H-beams, and beams that can withstand
extreme cold, are high value-added products that require
sophisticated technology and quality control. We produce various
section beams, including H-beams, angles, channels, and I-beams,
and are the only company in Korea that can produce large angles as
they require high-level design and rolling technology.
Heavy Machinery and Others
Hyundai Steel Company manufactures steel casting products for
sterns and ingots for forged steel, and supplies them directly to
shipbuilders. The Company also produces industrial-grade steel
casting products for a number of uses. We are one of the major
suppliers of rolls, producing various casting rolls including
centrifugal casting HSS rolls and ADM rolls made with
state-of-the-art materials. Hyundai Steel Company is the only
company in the world where track assembly and other products for
heavy machinery, such as excavators, are produced from raw
materials to finished goods in the same factory.
Stainless Steel
Hyundai Steel Company’s technology has given it a global reputation
for stainless steel which is very popular at the moment as an
eco-friendly material because it is harmless to the body and 100%
recyclable, and shuts off air pollutants. We also ensure
appropriate quality levels and production capacity for customer
demand in the low-nickel stainless steel market. Stainless steel is
used in home appliance, transportation equipment, steel pipes, and
many other products.
Hyundai Steel Company develops, produces and supplies a wide range
of top quality products based on know-how built through long
experience and the highest caliber of technology. By introducing
customized products that meet the needs of an ever-changing world,
we are leading the global steel market.
Hyundai Steel 2012 Annual Report Lead the Growth
01 02 03
Hot-Rolled Coil
HRC (Hot-Rolled Coil) is rolled into its final shape by applying
very high temperatures to steel slabs which are part-finished steel
products shaped like flat boards, and by pressing and expanding
them to be thinned. Hyundai Steel Company is a leading supplier of
HRC in Korea, with production capability begun by completing Blast
Furnace No.1 at the Dangjin Works in 2010. The Dangjin Works is
equipped with fully- automated facilities that guarantee the
quality of its products, and has completed R&D activities for
all type of steel for automobiles within two years from the
operation of the blast furnace. Hyundai Steel Company can thus
provide high-quality HRC for automobiles, enabling the Company to
play an essential role in Hyundai Motor Group’s production. The
Dangjin Works also produces HRC products used for home appliances,
construction materials, machinery bodies, and oil pipelines.
Heavy Plate
With the completion of its Integrated Steel Mill, Hyundai Steel
Company established complete heavy plate production from materials
to parts. The Company now has fully-automated production lines to
meet customer needs, and, within two years of beginning production
of heavy plate, has completed the development of almost every type
of heavy plate for shipbuilding. Hyundai Steel Company has won
approvals for its manufacturing processes from classification
bodies in various countries, and is now able to produce steel for
general shipbuilding and high-strength steel through the successful
development of heavy plate for use at low temperature and
high-strength plate. In addition, it manufactures a wide range of
high-quality heavy plate products for use in boilers, pressure
vessels, welding and structural work, bridges, industrial
machinery, oil pipelines, and plants.
Hyundai Steel 2012 Annual Report Lead the Growth
Products made in the blast furnaces of Hyundai Steel Company have
written a new chapter in the history of the steel industry in
Korea, and are highly acclaimed at home and abroad due to their
outstanding quality and develop new types of steel. We will push
towards a new horizon in the global steel industry by always
looking to enhance product quality.
01 Blast furnace
02 Heavy plate
03 Hot-rolled coil
28 29
* The ‘World-Class Products of Korea’ designation, awarded annually
by the Korean Ministry of Knowledge Economy, is given to products
that rank in the top five in terms of world market share, and which
also have more than 5% of the world market. They must also have an
annual export value of at least USD 5 million, or their global
market must be more than USD 50 million and more than twice the
domestic market.
Hyundai Steel 2012 Annual Report Lead the Growth
Six of our products have earned the honor of acquiring the
‘World-Class Product’ certification*, thanks to our continuous
product innovation. These include H-beams, high-speed steel rolls,
steel-casting products for ship parts, inverted angles and track
shoe assemblies. This shows how we apply the highest standards to
all our products.
Hyundai Steel Company was the first steelmaker in Korea to produce
H-beams. These are often used in beams and pillars for skyscrapers,
factories and gymnasiums, thanks to their strength, shock
absorbency, and the ease with which they can be welded. They are
also used in apartments, shopping centers, subways, and bridges.
Demand is rapidly increasing, driven by the increasing need for
buildings in earthquake-prone areas to be more resistant to shocks
and shaking.
H-beams Track shoe assemblies form the substructure for excavators,
distributing their weight evenly and helping them maintain their
grip over wet land, sand and gravel. Hyundai Steel Company has been
supplying major construction and machinery companies in Korea and
abroad since 1985, and now boasts a domestic market share of 75%,
an Indian market share of 45%, and a Japanese market share of
10%.
track Shoe Assemblies
Inverted Angles Inverted angles minimize the weight of vessels as
they become larger, and reduce the effects of shocks when vessels
collide. In 1982, Hyundai Steel Company became the second company
in the world to develop inverted angles, and the Company is pushing
the development of high-strength steel products to be used in high
value-added ships. Our inverted angles are sold to Hyundai Heavy
Industries and other shipyards in Korea, Japan, and China.
High-Speed Steel (HSS) Rolls
First developed in 1993, Hyundai Steel Company’s HSS rolls received
the World-Class Product certification in 2001. With enhanced
abrasion and thermal resistance, HSS are mainly used to make rebar,
beams, and ship parts. The Company is also developing carbide steel
plate rolls. Hyundai Steel Company produces more than 20,000 tons
of HSS rolls a year, 70% of which goes to the domestic
market.
Sheet Piles Sheet piles are used to bear the horizontal and
vertical loads created by upper-level pressure. Prior to the
development of sheet piles, log piles were buried underground to
prevent landslides, but they are not durable and were too weak for
use with large structures, so sheet piles were developed to remedy
this problem. They are widely used in permanent structures, flood
control, and temporary earth-retaining structures.
Steel Casting Products for Ship Parts
Most ship structures require steel casting products, including the
rudder horns that support rudders and stern bosses to hold
thrusters. These require high quality control and specialist
technology as they must be resistant to corrosion, vibrations, and
foam under the sea. Hyundai Steel Company boasts a 40% global
market share in this sector.
30 31
Hyundai Steel Company’s portfolio of world- class products enables
us to stand out from our competitors in the global steel
market.
Production Portfolio & Performance
2010 3,319
2011 3,163
2012 3,114
SALES VOLUME (Unit: Thousand tons)
Sales of high-strength rebar recorded 488,000 tons, up 189,000 tons
year-on-year as we increased sales of value-added products such as
SD500/600 rebar. We intensified our efforts to attract turn-key
orders for large-scale projects, leading to a good performance with
sales of 3,114,000 tons despite global economic downturn and
increasing difficulties in construction.
19% Hot-rolled coil is our main product, making up 46% of total
sales in 2012. Steel sheets for automobiles, a main focus for 2012,
saw sales volume of 2.97 million tons, up more than 23% over the
previous year. In addition, we are strengthening our
competitiveness through continual product development in general
hot-rolled coil products. Sales volume for hot-rolled coil as a
whole increased by 327,000 to 7,560,000 tons.
46% We aimed to sell strategic products such as ultra-large track
assemblies and high value-added steel castings for offshore plants
in order to overcome sluggish demand for steel castings for
excavators and ships. Sales volume of heavy machinery and others
reached 1,095,000 tons in 2012.
We expanded the sales of 200 series and 400 series to improve
profitability, and efforts are under way to explore new markets.
Sales volume for stainless steel in 2012 was 89,000 tons.
7%
(Unit: Thousand tons)
H-beams, along with rebar, have been major products of Hyundai
Steel Company. We sought to expand the sales of SHN and supply new
products for TMC H-beams. Sales volume for SHN/large-size H-beams
was 404,000 tons, up 16,000 tons over the previous year. Our focus
was on securing stable profitability by serving each client company
with differentiated services, and by increasing overseas orders.
The sales volume of H-beams in 2012 was 3,234,000 tons.
20%
2010 3,610
2011 7,233
2012 7,560
(Unit: Thousand tons)
8% The sales volume of high-quality steel in 2012 was 244,000 tons,
up 11.4% year-on-year, as we increased sales of strategic products
like TMCP heat-treated steel. Efforts were made to win turn-key
contracts, increase profitability, and to develop new products. In
2012, the Company sold 1,249,000 tons of heavy plate.
2010 815
2011 1,343
2012 1,249
3332
Hyundai Steel Company has become a leading global steelmaker.
However, this is not enough for us – there is always room to
improve, and we continue to do our utmost to achieve profitable
growth and to build the foundations for future success.
Production & Sales Plan | Research & Development | Facility
Enhancement | Next Step | Manufacturing Process
34
Hyundai Steel Company seeks opportunities to solidify and diversify
our business. In 2012, despite challenging market conditions, as a
part of our continuing efforts to drive our business forward, we
continued to make investments into products and facilities,
including the on-going construction of Blast Furnace No.3.
35
02 Expansion of production and sales of HRC for automobiles
03 Expansion of production and sales for high value-added products
such as mega-size work rolls
03
Hyundai Steel 2012 Annual Report Power the Future
By operating its blast furnaces, Hyundai Steel Company is able to
balance the production of long steel and flat steel products, and
to supply high value-added products both to the construction sector
and automobile and shipbuilding industries. We continue to increase
sales volumes and profitability by offering competitive products
and services.
Production
Long steel and flat steel products 75% and 25%, respectively, of
company sales in 2009 before its blast furnaces came on-stream.
Most products were supplied to the construction sector, and
therefore results and earnings were strongly influenced by that
sector’s successes and failures.
Blast Furnace No.1 began commercial production in April 2010,
enabling flat steel sales to increase to 38.5% of the company’s
total, and a matching fall in long steel to 61.5%. When Blast
Furnace No.2 started commercial production in January 2011, flat
steel rose to 53%, and became the main driver of sales.
The Company has accordingly focused more on the automobile and
shipbuilding industries than on the construction sector, and, as a
result, the volatility of revenues and profits has been
significantly reduced. In addition, its product mix has diversified
and solidified to meet various needs of our customers.
The Company continues to work to maximize efficiency and synergies
within its long steel business and blast furnace business. Such
efforts are expected to improve its profitability over the long
haul.
2013 Sales Plan
Hyundai Steel Company has built an 8 million ton production system
through the operation of Blast Furnaces No.1 and No.2 on top of the
existing electric arc furnace business. When Blast Furnace No.3 is
completed in September 2013, Hyundai Motor Group’s steel
independency will be completed. Moreover, the completion of Blast
Furnace No.3 will mean that sales of hot rolled steel will rise in
2014. forecast sales volume for 2013 is 16.7 million tons, with KRW
13.6 trillion in revenues. This forecast comprises 8.7 million tons
from existing businesses, including the electric arc furnace
business, and 8.0 million tons from the blast furnace business,
with revenues from the existing businesses expected to be KRW 6.2
trillion and KRW 7.4 trillion from the blast furnaces.
Hyundai Steel Company aims to increase its sales of automotive
steel, with a focus on large-scale actual demand, and will also
expand sales to large construction companies in 2013. With the
completion of Hyundai Hysco’s Cold Rolling Plant No.2 in May 2013,
demand for automotive steel is expected to rise, which will
solidify the Company’s position as a leading specialist in steel
for automobiles. Sales of higher- margin steel will grow to 20% of
total revenues through the sale of products such as API and
earthquake- resistant steel. This effort to expand the sales of
high value-added steel will help the company strengthen its
profit-oriented sales structure.
In 2013, the Company will stabilize sales volumes and add to its
earnings. This will be achieved through enhanced customer
management, increasing sales of strategic products, and pro-active
responses to market changes. Major operational strategies are as
follows: first, we will secure a stable sales base by strengthening
our sales network with a focus on large-scale actual demand. And we
will gain an early edge in the market by responding preemptively to
demand from new markets and improving our ability to cope with
low-priced imports. Secondly, we will strengthen our customer
relationships and enhance customer satisfaction. This will be
achieved by diversifying and solidifying the communication channels
with customers, and improving the competitiveness of our sales
staff. Thirdly, we will maximize sales of strategic products and
increase the range of high value-added steel products to lift
profitability.
38 39Hyundai Steel 2012 Annual Report Power the Future
02
03
03 Development of High strength H-beam (SHN570)
01
Electric Arc Furnace
High-strength Rebar Hyundai Steel Company was the first steel
company in Korea to succeed in commercializing SD600 rebar,
achieving joint growth with construction companies. This product
boasts a 20% higher yield strength than SD500, reducing
construction costs by 10-15% by allowing for wider spacing between
each rebar. With the trend towards building larger and higher
buildings and strengthening earthquake-resistant designs, there is
continuing higher demand for high-strength rebar.
High-strength Rebar for Nuclear Power Plants Hyundai Steel Company
pioneered the development of high-strength rebar for nuclear power
plants. The Company supplies high-strength rebar to domestic power
plants and is initiating a push into overseas markets. Product
quality and reliability have been improved through technological
cooperation with entities such as the Korea Concrete Institute and
Korea Hydro & Nuclear Power Co. The development of
high-strength nuclear rebar is expected to allow lower rebar
workloads, shorter construction periods and about 20% savings in
the application of high-strength structures.
Earthquake-resistant Steel The extreme damage caused by the
devastating earthquake in Japan led many countries to enact laws
making the construction of earthquake-resistant buildings
mandatory. This means that the need for earthquake-resistant steel
has increased substantially. Hyundai Steel Company is ramping up
its development of earthquake-resistant steel to meet this
challenge head-on. Its efforts will also include the introduction
of a quality guarantee system.
H-beams for Offshore Structures With increases in the construction
of offshore plants near the North Sea and greater demand for
large-scale facilities like FPOs, demand for lighter products with
greater resistance to extreme climates has risen. In order to
respond actively to these trends, we completed the development of
S355G11, our H-beams for offshore structures. This enabled us to
attract turn-key orders for both high- specification H-beams and
heavy plate for a single project.
Acquisition of KEPIC Certification The Korea Electric Power
Industry Code, a certification which inspects power operators,
designers, manufacturers, constructors and materials makers,
guarantees the quality in constructing utilities, especially
nuclear power plants. In 2012, Hyundai Steel Company acquired KEPIC
certification, which will enable the Company to increase sales of
materials for power plant construction, thus improving corporate
value and solidifying its product competitiveness.
Blast Furnace
Achievements of Collaborative R&D The Dangjin Works has become
essential to Hyundai Motor Group’s value chain, as its blast
furnaces ensure the timely supply of high-quality HRC. Hyundai
Steel Company, Hyundai Hysco, Hyundai Motor and Kia Motors jointly
established a research institute at Dangjin Works in 2007, prior to
the construction of blast furnaces, to ensure a collaborative
R&D system. As of the end of
Hyundai Steel Company is engaged in a myriad of R&D activities
in a bid to drive sustainable growth and to lead the future of the
global steel industry. To this end, we have expanded our specialist
workforce and strengthened the relevant infrastructure to make sure
we secure the distinctive technology we need.
40 41
2012 2013 2014 2015-2016
Specialized/ Strategic
Automobiles
• High-strength hot-rolled alloy steel (60kg, 80kg)
• Ultra high strength steel with high formability (120kg,
150kg)
• Next-generation steel (High Mn steel, etc.)
• Joint development of steel types using new technologies •
Developing module testing/interpretation technologies
HRC
• Guaranteeing API low- temperature toughness (-40)
• High-alloy steel
Development of product/technology package (jointly winning
large-scale project orders) • Developing customized steel •
Developing extreme materials for special environments • Securing
applied technologies for extreme materialsHeavy Plate
• Hull structure • Architectures and
• Application for extreme atmosphere
Hyundai Steel 2012 Annual Report Power the Future
2012, 325 researchers were taking part in the research. This has
enabled the current engineering system to be put in place, through
which material development takes place simultaneously with the
initial design stage, thus significantly reducing development costs
and time.
Through these R&D efforts, we had completed the development of
basic steel types – 81 for automobiles, 122 for general HRC, and
128 for heavy plate – by 2012, and shown that we can develop and
produce every type of steel demanded by the market. In 2013, we
will strive to develop next-generation and proprietary steel
technology such as ultra- high-strength steel sheets for
automobiles and heavy plate for extreme environments. This will
enable us to remain competitive in the future and brace ourselves
against rapidly changing product trends.
Technological Competitiveness We cover multiple fields in R&D
to build our technological skills to the highest levels. We have
expanded our focus on R&D through the addition of specialists,
and bolstered our research capabilities through technological
training and education programs. In addition, we have built
strategic alliances through technological cooperation with major
companies and institutions, and product competitiveness is being
built up through the securing of vital patents.
R&D Performance and Planning
Completing R&D for basic steel grade (331 grades) Coverage
ratio 99%
R&D for next-generation steel grades Expanding unique steel
type (leading future market)
SPECIALIzED AUtOMOtIVE HIgH-StRENgtH SHEEt
Next-generation steel sheet (light weight)
HIgH PERFORMANCE HIgH-QUALItY StEEL
High toughness HRC for earthquake-resistance
HIgH-StRENgtH HEAVY PLAt FOR ExtREME CONDItION
High strength, ultra-low temperature resistant plate for offshore
structures (-60)
Sour resistant API (60kg) for line pipe
AUtO (HRC)
HEAVY PLAtE
2012 2013-2016
42 43
Streamlining Large-scale Plants
Construction took place to streamline facilities at our large
plants in Incheon, enhancing productivity and the quality of
large-scale H-beams, and establishing an appropriate facility for
the production of H-beams for extreme climates. This has improved
the production specification of larger products, thus diversifying
our product portfolio. It also increased our ability to win
construction orders, which enabled us to build a strong position in
the market for ultra-large structures.
Increasing Facilities for the Production of Specialty Steel
We expanded our molding and fettling facilities for round steel in
response to such factors as higher demand for specialty steel for
automobiles and other industrial usages, reduced rebar operation of
ours, and increased rebar development and production by other
companies. This investment enabled us to increase the supply of
specialty steel for automobiles to Hyundai Motor and Kia
Motors.
Replacing with LNg Fuel
Facility construction began to replace Bunker C oil with LNG as the
fuel for our rebar and H-beams plants. This is expected to raise
fuel efficiency and reduce costs, while cutting greenhouse gas
emissions by 31%.
Investing in Facilities for Heavy Machinery
Facility investment for heavy machinery is complete, so that we can
respond to increases in demand for heavy machinery in overseas
markets, including China, and particularly from the second half of
2013. With the completion of this facility investment, we now have
a full heavy machinery product line-up at our Pohang Works, and can
offer better quality and greater reliability to the market.
Increasing Capacity for Hot-rolled Coils
Hyundai Steel Company plans to increase facility capacity at both
the B-HRC and C-HRC mills in 2013. With the completion of Blast
Furnace No.3, annual production capacity of the C-HRC mill will
increase by 2 million tons to 5.5 million tons, so that the Company
will be able to provide high-quality HRC. In addition, a 7th stand
will be added at the B-HRC mill, which will enable annual
production capacity to rise to 3.25 million tons, up 250,000 tons.
The additional stand will reduce roll overload and increase
productivity.
Investment to boost productivity and efficiency is essential in
order to accelerate growth and create a sustainable future. Hyundai
Steel Company makes investments on multiple fronts in order to
establish market-leading and eco-friendly facilities.
Hyundai Steel 2012 Annual Report Power the Future
The construction of Blast Furnace No.3 has seen rapid progress, and
it is scheduled to be complete in September 2013. As a result,
Hyundai Motor Group’s long-cherished hope of being able to go from
hot metal to completed automobiles will be realized.
#1 #2
the Significance of Blast Furnace No.3
Blast Furnaces No.1 and No.2 have enabled the successful production
of such high-quality steel as heavy plate for ships and HRC for
automobiles. We will have a total production capacity of 12 million
tons – 8.5 million tons of HRC and 3.5 million tons of heavy plate
– when Blast Furnace No.3 (4 million tons of full capacity – 2
million tons of HRC and 2 million tons of heavy plate) is
completed. This higher level of production and sales of HRC for
automobiles will complete the value chain of Hyundai Motor Group.
As well as improving stability of supply, this will ensure the
stable operation of the Integrated Steel Mill, which will in turn
enable us to enhance flexibility in our production.
Progress of the Blast Furnace No.3 Project
The construction of Blast Furnace No.3 began in April 2011 based on
our successful construction experiences of Blast Furnaces No.1 and
No.2. The construction period will be about 30 months from
beginning to end, and the cost will be around KRW 3,255 billion.
Commitments have already been made for the financing of the
construction of Blast Furnace No.3, with loans to be extended as
construction proceeds. With the additional revenues being made at
Blast Furnace No.2, over 50% of financing is expected to come from
internal profits. Other financing includes export credit agency
loans from prestigious overseas banks, backed by guarantees from
several Government agencies, as well as syndicated loans made
through a consortium of Korean banks, similar to Blast Furnaces
No.1 and No.2.
We are making good use of the experience and expertise we gained in
constructing Blast Furnaces No.1 and No.2 in the construction of
Blast Furnace No.3. This includes sourcing locally where possible,
and making best possible use of existing infrastructure. Structural
construction began in 2011, and we made good progress in civil
engineering, building construction, and the equipment of facilities
in 2012. Pilot operation and final construction at each facility
will be completed in 2013, and we expect commercial production will
begin within 2013, after the scheduled blow-in of No.3 Blast
Furnace on September 27th, 2013. At the end of 2012, the project
was 85% complete, and everything was progressing smoothly.
Investment Effects of Blast Furnace No.3
Economies of Scale With annual production capacity of 12 million
tons after the completion of Blast Furnace No.3, we expect to
achieve dramatic economies of scale. We will be in a stronger
position to negotiate lower prices for the 30 million tons of raw
materials that we will need. We also anticipate an appreciable
increase in production efficiency and decrease in costs as we
enhance our production capacity by 50% through the share of
existing infrastructure such as piers and facilities including
railway lines.
Stable Production Blast furnaces need major repairs, including the
replacement of refractories, every ten to fifteen years. These
repairs take approximately one to two quarters to complete,
significantly reducing the operating ratio of a facility with only
two furnaces. The same applies to unexpected and unscheduled
interruptions to operations. As a result, many of the world’s
leading steelmakers operate two or more blast furnaces.
(Unit: KRW billion)
‘11
816
‘12
1,652
‘13
787
(Unit: Thousand tons)
HSC Contribution
6,550
‘12
3,816
4,240
150
3,430
218
3,440
240
3,167
100
3,082
If three blast furnaces are in operation, a mill can theoretically
maintain an operating ratio of at least 67%, and sometimes up to
70% or more through increases in transient production at other
blast furnaces during renovations or in the case of emergencies.
The completion of Blast Furnace No.3, therefore, will give Hyundai
Steel Company a stable production system.
Market Opportunities The increasing production of Hyundai Motor and
Kia Motors both at home and abroad and the continuing satisfactory
performance of Korea’s heavy industry companies mean that demand
for flat steel in Korea is expected to increase. The 4 million
additional tons of molten metal produced by Blast Furnace No.3 will
be used to make 2 million tons of HRC and 2 million tons of heavy
plate. Given current and expected market conditions, we expect all
of this increase will be readily absorbed by the market.
Status of No.3 Blast Furnace Construction Project
(as of March 31, 2013)
Total progress
Equipment production
95.7 98.2 100.0 92.0 99.3 97.1 90.5 82.6
Future Vision and goals
Synergy Effects between Electric Arc Furnaces and Blast Furnaces
With the completion of Blast Furnace No.3, we will make a greater
leap forward as a global steelmaker equipped with a balance
portfolio of electric arc furnaces and blast furnaces compared to
world-class global steelmakers. A robust product mix of long steel
products including rebar, H beams, beams, stainless steel and heavy
machinery, and flat steel products including HRC and Heavy plate
will strengthen our competitiveness by catering to diverse customer
needs. Synergies of electric arc furnaces and blast furnaces will
lead to more efficient and cost and sales systems. This will put in
place superior income and financial structures compared to
competitors.
Satisfying Steel Needs of the Hyundai Motor Group We will become a
steelmaking affiliate playing a pivotal role for the growth of the
Hyundai Motor Group by catering to its steel needs under an ideal
parent-subsidiary model. We will provide even more competitive
solutions driven by the Group’s essential technologies and
competency in acquiring orders – Hyundai Steel Company and Hyundai
Motor Group will be able to jointly take part in large-scale
projects at home and abroad. High-quality steel will be mass
produced in tandem with the product and quality innovation of the
Group specialized in automobiles. With the integrated steel mills
specialized in automobiles, we will be able to enhance the
competitiveness of Hyundai Motor and Kia Motors in developing
forward-looking vehicles.
Global Leader in Steel Industry We are at the forefront of Korea’s
steel industry by merging with Kangwon Industries, and acquiring
Sammi Steel and Hanbo Steel, contributing to streamlining the steel
industry in Korea. Such pioneering efforts will be carried one as
all staff at Hyundai Steel Company will do the utmost to make the
company a global leader in steel.
46 47Hyundai Steel 2012 Annual Report Power the Future
Major Process of No.3 Blast Furnace Construction Project Project
period: April 2011 ~ September 2013 (30 months)
2011
2012 REFRACtORY CONStRUCtION
StRUCtURE CONStRUCtION
01
01 The construction site of Blast Furnace No.3, which was 96%
complete (as of 31 March, 2013)
02 Installed the Blast furnace shell tier10 (10 July, 2013)
03 Pulverized Coal Injection facility of Blast furnace No.3 is
under construction (31 March, 2013)
02 03
48 49
Hyundai Steel Company’s electric arc furnaces and blast furnaces
are known for their state-of-the-art technology and high levels of
efficiency.
Hyundai Steel 2012 Annual Report Power the Future
5150
Hyundai Steel Company believes that to be a truly successful
company, we must also fulfill our environmental and social
responsibilities. We will face tomorrow’s challenges today and lend
our hands out to where they are needed.
Environmental Management | Social Responsibility | Core
Values
We aim to be a good corporate citizen and to operate our business
in a responsible way for the good of society and the environment.
Hyundai Steel Company commits to socially responsible and green
management to create long-lasting value for our stakeholders.
5352
Sustainability is fundamental to our values- based business model,
and that is why we respect nature.
Jung Seung-hoon
Jeon So-young
Assistant Manager, Seoul Office
I am very proud and pleased to be a part of a team which is very
talented and purpose- driven.
When I grow up, I want to be an engineer, so that I can make the
world a better place to live in just like my dad does at his
work.
Kim Hyun-min, Child of Kim Young-hwan
Deputy Manager, Dangin Works
Environmental Management Policies Hyundai Steel Company has put
into place comprehensive environmental management guidelines, and
we implement sector/stage-specific action plans. As a part of these
efforts, we have strengthened environmental management both inside
and outside the Company. The core elements of our environmental
strategy are: establishing a system for managing and recycling
resources; facilitating communication with the local community;
responding to climate change; minimizing the emission of
pollutants; and establishing an environmental management system.
Accordingly, we set a management strategy for each core element. We
also have classified our environmental management into stages –
foundation, supplementation, expansion, and strengthening – and set
specific goals for each.
For our enterprise-wide environmental management, we integrated the
environment management system certification (ISO14001) previously
divided between the Incheon, Pohang, and Dangjin Works in 2012. In
2011, we became the first in the steel industry in Korea to acquire
pilot certification for our energy management system (ISO50001). We
have conducted Carbon Footprint Management projects since 2009 to
expand environmental management to our partner companies.
Environmental Organization To ensure more efficient and systematic
environmental management, divisions at each business site and the
Seoul office deal with separate functions. The Planning Division
does our environmental and energy management business planning, and
gives policy directions. Each site focuses on complying with the
relevant laws and maintaining its facilities. Hyundai Steel R&D
Center looks at how to reduce pollutants through technology, while
environmental management is interlinked amongst different sectors
within the company.
Hyundai Steel Company is committed to ensuring its sustainability
by conducting its business in an environmentally responsible way.
This is a core management policy, and, guided by this principle, we
do our utmost to respect and protect the environment to achieve
healthy growth.
Hyundai Steel 2012 Annual Report Lend a Hand
0302
02 Hyundai Steel Green Guardians
03 Development of HRC for electric vehicles (Blue on EV)
AMOuNT OF RECyCLE FOR SALG
(Unit: Thousand tons, As of December 31, 2012)
In-house
Better Energy Usage
We have established a target to reduce energy usage by 1.5% every
year, and to save energy and maximize the recycling of waste energy
in our processes, so that we can improve our energy cost
competitiveness to global levels. To this end, the energy saving
task force at each business site shares its energy reduction
technologies and examples of energy usage improvements to ensure
efficiency in energy performance.
Response to Climate Change INtERNAL SYStEM: Hyundai Steel Company
has completed a GHG (greenhouse gas) inventory system to help in
the implementation of the GHG & Energy Target Management
System, specifying the potential for energy usage reduction in each
production process in line with company-wide reduction targets. We
have completed our environmental analysis for each product and at
each business site, and have thus been able to set goals for
lowering GHG emissions over the mid to long- term, and to develop
technologies that will reduce our energy usage and curtail our GHG
emissions.
VERIFIED CARBON StANDARD: In collaboration with Korea Midland Power
(KOMIPO), Hyundai Steel Company has developed the VCS (Verified
Carbon Standard) on the byproduct gas power plant of Hyundai Green
Power within its Dangjin Works. The program uses gas byproducts
from the Integrated Steel Mills instead of fossil fuels to generate
power, contributing to a reduction in fossil fuel use. We will
strive to reduce the output of GHG while recycling waste energy. We
also continue to explore how we can reduce the emission of GHG both
inside and outside the Company.
CARBON FOOtPRINt MANAgEMENt WItHIN tHE SUPPLY CHAIN: Hyundai Steel
Company participated in the Large Company / Small & Medium
Enterprise Carbon Partnership project from the Ministry of
Knowledge Economy. Through this project, the Company supported 40
partners – raw material suppliers, scrap suppliers, and car
component makers – in reducing and controlling their GHG emissions
between June 2009 and May 2011. In particular, we supported the
establishment of GHG management systems for their products, the
creation of GHG inventory and energy management systems for their
business sites, the establishment of energy management systems, the
conducting of due diligence and the setting of goals for energy
usage.
Energy Saving Efforts
Energy usage Targets: ENERgY USAgE tARgEtS: Beginning in 2009, our
Incheon Works set and implemented targets for reducing energy usage
under the Energy Usage Target Management Pilot Project of the
Ministry of Knowledge Economy and the Korea Energy Management
Corporation (KEMCO). Led by its energy conservation taskforce, the
Incheon Works improved its processes, replaced worn-out facilities,
and increased its overall operational efficiency. Our efforts led
to a reduction in CO2 emissions of about 200,000 tons ahead of
schedule, and were rated highly by the Ministry and KEMCO.
ENERgY MANAgEMENt SYStEM CERtIFICAtION: We take part in projects
certified under ISO 50001, the international standard on energy
management systems, and were the first Korean steelmaker to earn
this energy management system certification, receiving global
recognition.
SEOUL OFFICE INCHEON WORkS &
PRODUCtION tECHNOLOgY OFFICE
Energy Technology Team
PRODUCtION SUPPORt OFFICE
key Performance Review
Home Repairs for Hope Hyundai Steel Company runs a “Home Repairs
for Hope – Enhancing Energy Efficiency in the Home” program. This
improves the living conditions of low-income families, reduces CO2
emissions, and creates jobs.
Environmental Classes for Children Hyundai Steel Company offered
classes on global warming and climate change to 1,000 children from
Incheon, Dangjin, and Pohang. These included camps, quizzes, and
environmental projects. These “Green Guardians”, children who
practice environmental preservation and protection in their daily
lives, go on to learn about the importance of the environment
through personal experience and lectures.
Donations on New year’s Day and Chuseok (Korean Thanskgiving) On
New Year’s Day and at Chuseok, Hyundai Steel Company staff
delivered 3,000 gift sets to underprivileged families in the
community. These included articles for the celebration of ancestral
rites. The company also donated KRW 150 million worth of
traditional market gift certificates to local charities.
Blood Donation Campaign The company participates in an annual blood
donation drive. It offers healthcare products to every employee who
participates, as a gesture of appreciation.
Sustainability Management Awards Hyundai Steel Company was
incorporated in the DJSI (Dow Jones Sustainability Index)
Asia-Pacific for the fourth consecutive year in 2012. Our efforts
for joint growth, human resource development, and health and
security were highly praised, and as a result, we ranked in the top
20% amongst the 600 companies evaluated in the Asia-Pacific region.
Total of 33 Korean companies were incorporated in the Index.
Hyundai Steel Company is actively engaged in social contribution
activities that aim to make a better future for everyone. We are
driven ‘to contribute to people’s happiness and to create a
sustainable society through eco-friendly economic activities and
the active fulfillment of our social responsibilities.’
SOCIAL CONTRIBuTIONS
Education and Training
04
03 Home Repairs for Hope for low-income families
04 Volunteer work for the underprivileged
05 Junior Engineering Classes for children
60 61
We also performed well in the DJSI Korea, against which Korea’s 200
highest market capitalizations were evaluated; only 52 companies
were incorporated in the Index, and we were in the top 30% of
these. These sustainability awards have improved our corporate
image, and we have established a number of Socially Responsible
Investment funds.
CSR Committee
Hyundai Steel Company formed a Corporate Social Responsibility
(CSR) Committee in April 2008. It plays a leading role in the
company’s growth by ensuring that it carries out all of its legal,
ethical, and social responsibilities.
Social Contributions Investments
Hyundai Steel Company’s goal is to be a sustainable, respected
company that grows alongside the communities in which it operates.
It encourages staff participation in a broad range of community
engagement programs, and addresses the specific needs of each
community and region.
In 2012, Hyundai Steel Company took part in various social
contribution activities involving social welfare, culture, arts and
sports, environmental protection and preservation, education and
training. We strived to continue to share despite the economic
challenges we face in our business. Investment into CSR in 2012
reached KRW 31,306 million, up KRW 19,089 million over the previous
year.
Employee Volunteer Performance
Hyundai Steel Company encourages its staff to participate in a
variety of volunteer activities, and takes these activities into
consideration during staff performance reviews In 2012, the ratio
of staff taking part in social contribution activities was 97%, up
15%p over the previous year, and the number of total volunteer
hours continued to rise, up to 111,140 hours.
Social Contributions Investment by Sector
(Unit: KRW million)
2010 2011 2012
Culture, Arts, and Sports 3,341 3,675 5,341
Environmental Protection and Preservation 250 252 306
Education and Training 848 1,364 1,194
Total 9,440 12,217 31,306
SECREtARIAt
COMMIttEE MEMBERS
Hyundai Steel 2012 Annual Report Lend a Hand
(Unit: %)
111,140
‘12
99,496
‘10
100,008
‘11
CSR Core Values All staff at Hyundai Steel Company share and
practice the core values of our corporate social responsibilities,
and aim to make the world a happier place through hope and sharing.
In doing so, we take the lead in creating a sustainable
society.
Make efforts to quickly respond to social needs of the world
Make efforts to fulfill its social responsibilities as a corporate
citizen
Make efforts to realize social values to promote human dignity and
happiness
Make efforts for eco-friendly business activities and environment
conservation
Work together with civil groups to build a sustainable
society
CSR CORE VALuES
62 63
Guided by our core values of Challenge, Collaboration, Customers,
Globality, and People, we create sustainable value for all of our
stakeholders.
We respect the diversity of cultures and customs, aspire to be the
world’s best at what we do, and strive to become a respected global
corporate citizen.
We refuse to be complacent, embrace every opportunity for greater
challenge, and are confident in achieving our goals with unwavering
passion and ingenious thinking.
We believe the future of our organization lies in the hearts and
capabilities of individual members, and will help them develop
their potential by creating a corporate culture that respects
talent.
gROUP CORE VALUES
All members of the Hyundai Motor Group must follow 5 core values of
behavior and decision-making. The Group’s goal is to build a
highly-creative corporate
culture based on challenge, cooperation, and respect for its
customers and workers.
This goal will be reached through the sharing and internalization
of its core values.
We create synergy through a sense of “togertherness” that is
fostered by mutual communication and cooperation within the company
and with our business partners.
We promote a customer-driven corporate culture by providing the
best quality and impeccable service with all values centered on our
customers.
Hyundai Steel 2012 Annual Report Lend a Hand
65
Independent Auditors’ Report 71
Consolidated Statements of Changes in Equity 75
Consolidated Statements of Cash Flows 76
Global Network 78
64
Hyundai Steel Co, Ltd. (“the Company”) is the only steelmaker in
Korea to run both fully integrated steel mills and mini-mill
operations. As Korea’s oldest steelmaker, the Company is a leader
in mini-mill steel production in Korea, and is growing
globally.
When commercial production began at its new state-of-the-art,
eco-friendly integrated steel mill facilities in April 2010, the
Company became one of only two integrated steel producers in Korea.
It now plans to expand its integrated mill production capacity to
approximately 12 million tons per year by 2014.
The Company manufactures and sells a diverse line of steel
products, including reinforcing bars, H-beams, structural sections,
HRC products, heavy plate, stainless steel products and other steel
products for heavy machinery. These products meet a broad range of
customer needs across manufacturing and other industries that
consume steel, including construction, automotive, shipbuilding,
home appliances, engineering and machinery industries.
Long steel products (such as reinforcing bars and H-beams) and flat
steel products (such as HRC and heavy plate) constitute
substantially all of the Company’s sales, accounting for
approximately 47% and 53%, respectively, of the Company’s total
sales volume in 2012.
Industry Overview
Due to the on-going financial crisis in Europe and sluggish
economic growth in emerging countries, the growth in the steel
industry that had been supported by an economic recovery from 2009
onwards came to a halt in the second half of 2011.
In 2012, the growth rate in consumption and production of steel
materials was down as a result of the continuing European financial
crisis, sluggish economic growth in China and inflows of low-cost
steel imports. However, a slow but a gradual recovery is expected
in 2013, thanks to a global economic rebound.
Demand and supply in the steel industry
(Unit: Thousand tons)
Total Demand 85,482 10.6 85,449 0.0 86,270 1.0
Domestic Demand 56,391 7.6 55,019 (2.4) 55,470 0.8
Exports 29,091 16.9 30,430 4.6 30,800 1.2
Production 72,283 9.6 72,910 0.6 74,060 1.6
Imports 23,121 (7.8) 20,766 (10.2) 20,200 (2.7)
Source: Korea Iron & Steel Association (Nov. 2012)
Steel supply and demand in korea
(Unit : Thousand tons)
Heavy Plate
Rebar
Beams
Cold-Rolled Coil*
Steel Pipes
Source: Korea Iron & Steel Association (Nov. 2012) * Excluding
stainless steel
Business Highlights Due to slowing growth in the downstream
industries, sales in 2012 were KRW 14,146 billion, down by 7.3%
year on-year. Sales volumes rose slightly, but unit prices dropped
in line with trends in the steel industry.
Hyundai Steel 2012 Annual Report Financial Review
YoY
Products Production (Thousand Tons) 16,045 16,181 (136) (0.8)
Sales Volume (Thousand Tons) 16,338 16,281 57 0.4
Sales (KRW 100 Million) 141,464 152,595 (11,131) (7.3)
Operating Income (KRW 100 Million) 8,718 12,745 (4,027)
(31.6)
Earnings Rate (%) 6.2 8.4 (2.2) N/A
Net Income (KRW 100 Million) 7,964 7,471 493 6.6
EBITDA (KRW 100 Million) 15,926 19,767 (3,841) (19.4)
Results of Operations
Income Operating income in 2012 was KRW 872 billion and operating
income rate was 6.2%, decrease by 2.2%p year-on-year, resulting in
deteriorating the Company’s profitability. However, the Company had
better profitability than most competitors globally thanks to cost
reductions in raw materials, efforts to expand lower-cost
production, and increasing domestic sales in the face of falling
prices in overseas markets.
Net income recorded KRW 796.4 billion, up by 6.6% year-on-year, in
part thanks to favorable foreign exchange rates.
(Unit: KRW billion)
Cost of Sales 12,730 13,447 (716) (5.3)
Gross Profit 1,416 1,814 (397) (21.9)
SG&A 545 539 5 1.0
Operating Income 872 1,275 (403) (31.6)
Financial Income 45 (420) 465 (110.7)
Income from Investment in Related Companies 18 25 (7) (28.0)
Other Income (4) 30 (34) (114.5)
Income Before Income Taxes 931 909 22 2.4
Income Tax Expenses 134 162 (28) (17.1)
Net Income 796 747 49 6.6
66 67
Hyundai Steel 2012 Annual Report Financial Review
Financial Condition As of the end of 2012, total assets had risen
by KRW 1,175 billion, or 5.4% year-on-year, to KRW 22,951 billion.
Current assets were down by KRW 1,132 billion due mainly to falls
in trade receivables and inventories. However, new investments,
including the construction of Blast Furnace No.3, enabled tangible
assets to rise by KRW 2,276 billion.
Liabilities were KRW 13,121 billion, up by 3.7% from end-2011, as a
result of a rise in corporate bonds and long-term borrowings
associated with the construction of Blast Furnace No.3. Total
shareholders’ equity was KRW 9,831 billion, up 7.8% from the
previous year, mainly due to an increase in retained earnings of
KRW 730 billion.
Liabilities went up, but equity rose more, which lowered the
debt-to-equity ratio by 5.3%p to 133.5%.
Sales by Segment Sales volumes for flat steel products increased by
3.2% year-on-year thanks to stable production in the Company’s
blast furnaces. Volumes for long steel, however, were down by 3.0%
year-on-year due to a slowdown in demand from the construction
industry, the source of most long steel demand. As a result, the
total sales increased by 0.4% year-on-year.
Sales Volume
Total 16,338 16,281 57 0.4
Sales for flat steel fell by 6.3% year-on-year, and long steel was
down by 8.6%, lowering total sales by 7.4%. These falls came about
because of the drop in sales unit prices due to the weak steel
market.
Sales
Total 14,146 15,260 (1,114) (7.3)
(Unit: KRW billion, %)
Total Shareholders’ Equity 9,831 9,119 712 7.8
Capital Stock 427 427 0 0.0
Other Contributed Capital 320 320 0 0.0
Retained Earnings 7,871 7,141 730 10.2
Other Comprehensive Income 1,231 1,248 (18) (1.4)
Treasury Stock (17) (17) 0 0.0
Total Liabilities & Shareholders’ Equity 22,951 21,777 1,175
5.4
Debt-to-Equity Ratio 134 139 (5)
Long-term borrowings rose by KRW 688 billion, but short-term
borrowings decreased by KRW 520 billion.
(Unit: KRW billion, %)
Cash and Cash Equivalents 879 987 (108) (11.0)
Short-term Financial Instruments 176 447 (271) (60.7)
Total Borrowings 10,322 10,154 168 1.7
Short-Term Borrowings 3,871 4,391 (520) (11.8)
Long-Term Borrowings 6,451 5,763 688 11.9
Net Borrowings 9,268 8,721 547 6.3
EBITDA 1,593 1,977 (384) (19.4)
Net Borrowings/EBITDA 6 4 1 31.9
68 69
The first quarter saw a seasonal drop in demand and lower prices
for steel products. The second quarter was more successful, with
increases in sales and a drop in the unit prices of raw materials
outweighing falls in product prices. In the second half of the
year, shrinking demand led to weak sales prices, resulting in lower
profits.
(Unit: Thousand tons, KRW billion)
Q1 Q2 Q3 Q4
Sales 3,558 3,862 3,410 3,316
Operating Income 156 324 227 164
Operating Margin (%) 4.4 8.4 6.7 5.0
7170
Future Plan Industry Outlook for 2013 Global economic growth for
2013 is forecast to hover around 2.4%, about the same as in
2012.
Demand growth for steel worldwide will continue to be sluggish in
2013. Demand volume is projected to be 1.45 billion tons, up 3.2%
year-on-year; global steel production is forecast to be 1.59
billion tons, up 2.5% from the previous year.
Domestic demand for steel is forecast to continue to slow, mainly
due to a delayed economic turnaround. The weak economy will
negatively affect the construction market. On the other hand, the
automobile industry is expected to maintain sales at the level of
the previous year driven by a turnaround in exports which will
counter the slowdown in domestic demand. There will be reductions
in sales volumes for shipbuilding due to low prices for new ships
and continuing reductions in order backlogs.
The price of iron ore, the Company’s basic raw material, is likely
to drop as a consequence of the global economic slowdown, while the
price of coal is expected to rise slightly driven by sustained
increases in demand for coking coal.
There are some hopes for an economic boost from the installation of
three new Governments in North-east Asia, such as South Korea,
China and Japan. It is possible that this may help demand, adding
to signs of a global economic recovery. However, the Company has
remained conservative in its outlook for 2013, and has not
reflected this positive geopolitical trend in its forecasts.
2013 Business Strategy Hyundai Steel Company will implement
business strategies to help the Company overcome the current
difficulties, and lay the foundation for sustainable growth.
First, we will build a stable profit base. This will be achieved by
expanding sales of high value-added products and domestic sales,
and by putting into place significant cost reductions through
low-cost production and careful management.
Second, the construction of Blast Furnace No.3 will be completed on
time in September 2013, and our experience with Blast Furnaces No.1
and No.2 will be used to stabilize operations in Blast Furnace
No.3. Every effort will be made to make our steel mills globally
competitive.
Third, we will focus on our technology and systems. We will secure
the technology for the mass production of steel sheets for
automobiles, develop next-generation types of steel, and establish
plant-specific optimal production systems and portfolios.
Performance Outlook for 2013 Sales volumes in 2013 are forecast to
hit 16.7 million tons, up 2.5% year-on-year. Sales prices are
forecast to be KRW 13.4 trillion, down 5%, as the average selling
price is expected to fall slightly due to surplus supply in the
global steel industry.
The first and third quarters are off-seasons for the Company, while
second and fourth quarters are peak seasons. Thus, the latter
seasons are expected to witness a change in the sales volume of
long steel products. As for flat steel products, a stable sales
structure will take place compared to long steel ones throughout
the year.
The Board of Directors and Stockholders Hyundai Steel
Company:
We have audited the accompanying consolidated statement of
financial position of Hyundai Steel Company and its subsidiaries
(the “Group”) as of December 31, 2012 and the related consolidated
statements of comprehensive income, changes in equity and cash
flows for the year then ended. Management is responsible for the
preparation and fair presentation of these consolidated financial
statements in accordance with Korean International Financial
Reporting Standards. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits. The
consolidated statement of financial position of the Group as of
December 31, 2011, and the related consolidated statements of
comprehensive income, changes in equity and cash flows for the year
then ended, were audited by other auditors, whose report thereon
dated March 7, 2012, expressed an unqualified opinion.
We conducted our audit in accordance with auditing standards
generally accepted in the Republic of Korea. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of the Group as of December 31, 2012 and its financial
performance and its cash flows for the year then ended, in
accordance with Korean International Financial Reporting
Standards.
Without qualifying our opinion, we draw attention to the
following:
1) The procedures and practices utilized in the Republic of Korea
to audit such consolidated financial statements may differ from
those generally accepted and applied in other countries.
Accordingly, this report is for use by those knowledgeable about
Korean auditing standards and their application in practice.
2) As discussed in note 2 to the consolidated financial statements,
the Group adopted the amendment to K-IFRS No.1001, ‘Presentation of
Financial Statements’ for the year ended December 31, 2012. The
amendment requires operating profit, which is calculated by revenue
less: 1) cost of goods sold, and 2) selling, general and
administrative expenses, to be separately presented on the
statements of comprehensive income. The Group applied this change
in accounting policies retrospectively, and accordingly restated
the comparative information of the statement of comprehensive
income for the year ended December 31, 2011.
This report is effective as of March 1, 2013, the audit report
date. Certain subsequent events or circumstances, which may occur
between the audit report date and the time of reading this report,
could have a material impact on the accompanying consolidated
financial statements and notes thereto. Accordingly, the readers of
the audit report should understand that the above audit report has
not been updated to reflect the impact of such subsequent events or
circumstances, if any.
Based on a report originally issued in Korean
Seoul, Korea March 1, 2013
Hyundai Steel 2012 Annual Report Financial Review
72 73Hyundai Steel 2012 Annual Report Financial Review
(In millions of won)
Short-term financial instruments 4,21,35 175,590 446,577
Trade and other receivables 5,35,36 2,026,858 2,541,264
Inventories 6 2,335,385 2,566,039
Other current financial assets 7,35 6,400 4,959
Other current assets 8 60,376 72,893
Total current assets 5,486,599 6,618,772
Available-for-sale financial assets 9,21,35 1,798,572
1,817,711
Investments in associates 10,21,36 219,551 188,884
Investment property, net 11,37 193,767 194,164
Property, plant and equipment, net 12,21,37 14,981,995
12,705,873
Intangible assets, net 13,14,37 140,757 116,758
Non-current derivative financial assets 22,35 828 9,696
Other non-current financial assets 4,7,21,35 129,046 124,545
Other non-current assets 8 272 305
Total non-current assets 17,464,788 15,157,936
Total assets 22,951,387 21,776,708
(In millions of won)
Short-term borrowings 5,16,20,21,35 2,206,169 3,131,499
Current portion of bonds 16,35 709,746 369,952
Current portion of long-term borrowings 5,16,20,21,35 955,447
889,711
Income taxes payable 92,090 77,610
Current derivative financial liabilities 22,35 845 -
Other current liabilities 17 69,616 39,340
Total current liabilities 6,121,675 6,379,823
Bonds 16,35,38 3,115,066 2,865,990
Non-current derivative financial liabilities 22,35 16,429
20,067
Other non-current financial liabilities 18,35 1,186 1,571
Defined benefit liabilities 19 57,936 57
Deferred tax liabilities 31 472,250 493,385
Total non-current liabilities 6,998,785 6,278,023
Total liabilities 13,120,460 12,657,846
Accumulated other comprehensive income 26 1,230,624 1,248,337
Treasury stock (17,188) (17,188)
Total equity attributable to owners of the Parent Company 9,830,927
9,118,862
Total equity 9,830,927 9,118,862
HYUNDAI STEEL COMPANY AND SUBSIDIARIES
As of December 31, 2012 and 2011
See accompanying notes to the consolidated financial
statements.
See accompanying notes to the consolidated financial
statements.
74 75
Note 2012 2011
Gross profit 1,416,446 1,813,667
Operating income 2,37 871,816 1,274,506
Finance income 438,004 203,812
Share of profit of associates 29,35 18,047 25,040
Other income 10 83,623 123,233
Other expenses 2,30 (87,969) (93,578)
Profit before income taxes 930,651 909,093
Income tax expense 31 (134,254) (161,953)
Profit for the year 796,397 747,140
Other comprehensive income (loss)
Change in fair value of available-for-sale financial assets 26,35
(19,165) (6,312)
Change in capital adjustments of equity method accounted
investments 26 (349) 464
Effective portion of changes in fair value of cash flow hedges
26,35 3,302 (2,128)
Foreign currency translation difference for foreign operations 26
(1,501) 1,488
Defined benefit plan actuarial losses 19 (24,055) (25,307)
Defined benefit plan actuarial losses of associates 10 (421)
-
Other comprehensive loss for the year, net of income tax (42,189)
(31,795)
Total comprehensive income for the year 754,208 715,345
Profit attributable to:
Total comprehensive income attributable to:
Owners of the Parent Company 754,208 715,345
Earnings per share
(In millions of won)
Balance at January 1, 2011 426,572 307,993 6,461,503 1,254,825
(19,962) 8,430,931
Total comprehensive income for the year
Profit for the year - - 747,140 - - 747,140
Change in fair value of available- for-sale financial assets - - -
(6,312) - (6,312)
Change in capital adjustments of equity method accounted
investments
- - - 464 - 464
Effective portion of changes in fair value of cash flow hedges - -
- (2,128) - (2,128)
Foreign currency translation difference for foreign operations - -
- 1,488 - 1,488
Defined benefit plan actuarial losses - - (25,307) - -
(25,307)
Transactions with owners of the Company, recognized directly in
equity
Dividends - - (42,060) - - (42,060)
Gains on sale of treasury stock - 11,872 - - - 11,872
Balance at December 31, 2011 426,572 319,865 7,141,276 1,248,337
(17,188) 9,118,862
Balance at January 1, 2012 426,572 319,865 7,141,276 1,248,337
(17,188) 9,118,862
Total comprehensive income for the year
Profit for the year - - 796,397 - - 796,397
Change in fair value of available- for-sale financial assets - - -
(19,165) - (19,165)
Change in capital adjustments of equity method accounted
investments
- - - (349) - (349)
Effective portion of changes in fair value of cash flow hedges - -
- 3,302 - 3,302
Foreign currency translation difference for foreign operations - -
- (1,501) - (1,501)
Defined benefit plan actuarial losses - - (24,055) - -
(24,055)
Defined benefit plan actuarial losses of associates - - (421) - -
(421)
Transactions with owners of the Company, recognized directly in
equity
Dividends - - (42,143) - - (42,143)
Balance at December 31, 2012 426,572 319,865 7,871,054 1,230,624
(17,188) 9,830,927
See accompanying notes to the consolidated financial
statements.
See accompanying notes to the consolidated financial
statements.
HYUNDAI STEEL COMPANY AND SUBSIDIARIES HYUNDAI STEEL COMPANY AND
SUBSIDIARIES
For the years ended December 31, 2012 and 2011 For the years ended
December 31, 2012 and 2011
Hyundai Steel 2012 Annual Report Financial Review
76 77
Profit for the year 796,397 747,140
Additions of expenses and others not involving cash outflows 33
1,254,294 1,499,259
Deduction of income and others not involving cash inflows 33
(347,445) (137,699)
Changes in assets and liabilities:
Trade and other receivables 545,784 (344,264)
Inventories 216,538 (276,720)
Other current assets 12,223 (1,419)
Other non-current financial assets (11,954) (26,799)
Other non-current assets 16 (30)
Trade and other payables 199,073 (88,132)
Other current liabilities 30,261 (14,693)
Other non-current financial liabilities (386) -
Payment of severance benefit (8,911) (106,738)
Defined benefit obligations (11,716) (13,059)
Plan assets 5,238 5,394
Interest received 65,379 81,941
Dividends received 20,974