Posted on 24 Mar 2023
A possibility is being raised that Hyundai Steel may withdraw its subsidiary from Russia following its exit from Beijing, China. This is because the operation of Hyundai Motor's plant in Russia has been halted due to the prolonged war between Russia and Ukraine.
According to industry sources on March 21, the operation of the Steel Service Center (SSC) operated by Hyundai Steel Russia has been suspended.
Hyundai Steel’s overseas SSCs sell automotive steel sheets to overseas production plants such as Hyundai Motor and Kia Corp. plants abroad. When Hyundai Motor builds overseas production plants, Hyundai Steel also builds SSCs nearby exclusively for their supply.
The possibility of withdrawing Hyundai Steel’s Russian subsidiary also emerged from the prolonged shutdown of Hyundai Motor's Russian plant. Hyundai Motor's St. Petersburg plant began operation in 2010. Its production capacity is 200,000 units per year, and its operation has been stopped since March last year.
Hyundai Steel has suspended the operation of its Russian subsidiary, but the Korean steelmaker says that it is not considering a withdrawal. Hyundai Steel is expected to choose between restarting or selling its Russian subsidiary as soon as the future of Hyundai Motor's Russian plant is decided.
Also, Hyundai Steel is currently in talks with an investor over selling Hyundai Steel Beijing Process in China. Hyundai Steel plans to wrap up its sale in the first half of this year. Its decision to sell its Beijing subsidiary is also attributable to Hyundai Motor's and Kia Corp.'s plummeting sales in China. Hyundai Motor's market share in China continued to decline from 3.4 percent in 2018 to 3.1 percent in 2019, 2.3 percent in 2020, and 1.8 percent in 2021. The Beijing subsidiary of Hyundai Motor posted a net loss of 49.6 billion won (US$38 million) in 2021.
Source:Business Korea
