Bolstered by record-high profit last year, Posco Daewoo is on track to start new businesses eyeing on higher profitability, vowing to grow as a general operating company beyond trading.

At an investors relations meeting held in Yeouido on Friday, Posco Daewoo CEO Kim Young-sang unveiled plans for structural changes in existing businesses and ways to create new values for the company.

“We need some structural changes in accordance with changing external conditions for sustainable growth,” Kim said. “We will seek the changes in a bid to become a general operating company beyond trading.”

According to earnings released Thursday, Posco Daewoo posted 22.6 trillion won ($21.2 billion) in consolidated sales of fiscal year 2017, up 36 percent from the previous year. The annual operating profit stood at 401.3 billion won, rising 26 percent during the same period.

Both figures set new highs for the firm. 

Posco Daewoo will focus on steel and resource development as two core businesses, and seek expansion in three businesses: food, vehicle cars and independent power producer, under its “2 Core + 3 Expansion” strategy.

The company plans to increase steel sales to 35 million metric tons by 2020.

To overcome rising trade barriers and respond swiftly to market needs, the firm will establish a distribution office in the US during the second quarter of this year.

The steelmaker is also planning to build a distributor for rebar in Myanmar and a stainless processing center in Turkey.

For resource development, the company is establishing an integrated energy value chain that will cover from gas mining to trading and power generation.

Posco Daewoo will take part in 10 new gas mining projects in the next five years with an aim to become a global exploration and production firm.

Kim said the firm’s future focus is also on food business.

It plans to acquire a grain export terminal in Ukraine and take over the operation in the first half of 2019. The company is also currently running a palm oil farm in Indonesia and rice processing center in Myanmar.

Posco Daewoo will partner with automakers to supply parts for electric vehicles, while expanding its IPP business in Myanmar, Uzbekistan and Honduras. 

By Song Su-hyun (song@heraldcorp.com)