Hyundai Motor Group’s steelmaker Hyundai Steel broke ground for the third blast furnace at its integrated steelworks in Dangjin, South Chungcheong Province on Tuesday.

The company is injecting 3.26 trillion won ($2.89 billion) into the project, which is scheduled for completion in September 2013.

The furnace will have an annual production capacity of 4 million metric tons, pushing the facility’s output capacity to 12 million tons.

The company currently operates two blast furnaces of equal capacity at the Dangjin plant.

Including the electric arc furnaces operated by the company, Hyundai Steel’s production capacity will be pushed up to 24 million tons once the new blast furnace is completed.

According to the company’s estimates, the increase in its production capacity will improve price competitiveness of its products and lead to cutting steel imports by as much as $12 billion on an annual basis.

The company said that the capacity increase will also allow it to prepare for the projected expansion in the global demand for steel products.

According to the company, the world’s steel consumption is expected to rise from the 1.2 billion tons recorded in 2008 to 1.8 billion tons in 2020. In particular, Southeast Asian nations’ steel imports will rise sharply to 46 million tons in 2015, the company said.

Hyundai Steel, which had operated only electric arc furnaces before the Dagnjin plant’s first blast furnace was fired up in January 2010, has also been carrying out extensive research and development projects as part of its efforts to maximize synergy with carmakers and construction firms within Hyundai Motor Group.

According to the company, it has finished developing steel beams suitable for use in earthquake-proof buildings. Hyundai Steel said that it has also finished developing 95 new plate-type products including 49 for use in automobiles, and plans to develop 40 additional products within the year.

By Choi He-suk  (cheesuk@heraldcorp.com)