DANGJIN, South Chungcheong Province ― Hyundai Steel, the nation’s second-largest steelmaker, has begun operation of a new blast furnace specializing in automobile parts steel to address customer demand amid escalating competition.

On Friday, the steelmaker affiliated with Hyundai Motor Group held the opening ceremony for its third furnace in Dangjin, South Chungcheong Province.

“Despite the worldwide economic slump, Hyundai Steel has invested some 9.9 trillion won ($9.1 billion) over the past seven years to reinforce steel manufacturing facilities,” said Chung Mong-koo, chairman of the conglomerate.

“This has not only created some 200,000 new jobs in the local community but also contributed to the nation’s economic growth.”

Thanks to the new furnace that has an annual capacity of 12 million tons, Hyundai Steel has become the world’s 11th largest steelmaker. This reflects a significant leap from 31st in 2006.

“There’s only a marginal distance to becoming the 10th largest company,” said a Hyundai Steel official. “Our goal now is to make it into the top 10 over the next 10 years.”

Notably, the steelmaker achieved its position purely through infrastructure investment, rather than depending on corporate acquisitions.

The affiliation with Hyundai Motor connects the steel firm to its key customers, such as carmakers, shipbuilders and construction companies.

“One of the key functions of the new furnace will be to produce high value-added products such as steel sheets for cars and rear plates for ships,” the official said.

The company will also build a special manufacturing unit on the site to produce steel parts to be used in car engines and transmissions.

“Last year, 2.3 million tons, or some 30 percent of the automobile-related steel items, were imported,” he said.

“By localizing the business sector and improving the trade balance, we have had a positive effect on the nation’s economy.”

By Bae Hyun-jung (tellme@heraldcorp.com)