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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Hyundai Steel announced on June 2 that it is in talks to sell its undercarriage equipment division at Plant 1 in Pohang to Daejoo KC Group, as part of an effort to restructure underperforming operations and address mounting pressure from low-cost Chinese imports.
The division specializes in manufacturing crawler tracks, key components used in excavators. Hyundai Steel is effectively the only major domestic producer of crawler tracks, aside from smaller firms. However, the segment has seen a significant decline in competitiveness and profitability in recent years.
According to Hyundai Steel, sales volume for the undercarriage unit dropped by approximately 65% in 2023 compared to 2021. The company cited aggressive pricing from competitors and Chinese imports as major challenges.
“In spite of continuous efforts to maintain competitiveness, we are facing structural limitations in the business due to the growing presence of rivals and cheaper Chinese products,” Hyundai Steel stated. “We are currently pursuing the sale of the undercarriage equipment division to focus on strengthening our core steelmaking capabilities and ensuring employment stability.”
The company added that, alongside the sale, it plans to implement internal job reassignments to guarantee employment and support affected workers in transitioning to stable roles within the organization.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
