Posted on 02 Dec 2024
South Korea’s steel-to-battery materials conglomerate POSCO Group will invest in the leading domestic robotics company to boost its ailing steel business through factory automation and seek a new growth engine.
Neuromeka Co., South Korea’s top collaborative robotics manufacturer, announced on Friday to issue 10 billion won ($7.2 million) in convertible bonds to POSCO Holdings Inc., the parent of the world’s No. 7 steelmaker POSCO and the electric vehicle battery materials producer POSCO Future M Co.
POSCO Holdings is set to secure a 3.81% stake in Neuromeka, if the conglomerate converts the debt securities into the Kosdaq-listed company’s stocks.
Neuromeka’s share jumped 7.77% to end 26,350 won, the highest close since July 24, in the South Korean stock market, far outperforming a 2.33% fall in the tech-heavy Kosdaq.
The group is expected to jointly develop collaborative robots and artificial intelligence systems for automation of its steel factories with Neuromeka.
The company produces collaborative robots, which can work with humans in the same space without the need for safety fences, and industrial robots, which can move on three or more axes and is used in manufacturing with programmable and automated systems.
TO CUT COSTS
The steel sector is less automated than other industries such as semiconductor and automobile businesses.
POSCO, which has automated some manufacturing processes such as moving molten iron, seeks to use the technology for other works, according to the company officials.
“POSCO, which has been struggling against cheaper products from China, is set to cut expenses such as labor cost through factory automation,” said a steel industry source. “The company will implement smart factories through AI integration.”
The leading South Korean steelmaker shut down a wire rod mill in the country while seeking to sell its entire stake in a Chinese stainless steel joint venture amid the cut-throat competition with rivals in the mainland and a supply glut.
NEW GROWTH DRIVERS
POSCO Holding’s purchase of Neuromeka’s convertible bonds is its first investment since Chang In-hwa, the group’s chairman and chief executive, took office in March.
Chang is expected to beef up the robot and factory automation sectors as the group’s new growth drivers, industry sources said. His predecessor Choi Jeong-woo led the transformation of POSCO Future M into a battery materials producer.
“We aim to implement an intelligent factory, which integrates AI and robot technology, beyond a smart factory,” Chang said before.
POSCO Group is expected to make major investments in those sectors with Neuromeka, industry sources said.
South Korean conglomerates such as Samsung Group have been concentrating on the convergence of robot and AI technology to expand their businesses in the enterprise AI sector with strong growth potential. Samsung Electronics Co., the world’s top memory chipmaker, is the No. 2 shareholder in Rainbow Robotics Co. and LG Electronics Inc. is the second-largest shareholder in Robotis Co.
Chang has been focusing on selling non-core assets with low profitability to restructure 120 units by 2026.
POSCO Future M sold its entire stake in a high-purity hydrogen peroxide joint venture to the business partner OCI Co. for the goal.
Source:KED Global
