Input 2021.04.06 16:53
On the 6th, POSCO Steel Sheet announced that it is reviewing its business relationship with Myanmar POSCO C&C, a joint venture established with MEHL. A POSCO official said, “We are thinking about various methods, including ways to sell or take over the shares of the joint venture,” and said, “There is no decision yet.”
POSCO Steel Sheet entered Myanmar in 1997 and established a joint venture with MEHL in Myanmar POSCO C&C in 2013. Myanmar POSCO C&C is producing 50,000 tons of colored steel sheets per year at a plant in Yangon, Myanmar. Last year’s sales were 31.4 billion won, and it turned to a surplus and recorded a net profit of 1.95 billion won.
POSCO Steel Plate has drew a line that it has stopped paying dividends since 2017 after the Myanmar military’s crackdown on human rights of the Rohingya people emerged, but pressure from the international community has continued.
The Dutch pension fund management agency’Public Pension (APG)’, which manages a fund worth $68 billion (approximately 754 trillion won), said on the previous day that it is concerned that POSCO’s relationship with the Myanmar military would undermine responsible investment obligations. Last month, U.S. Secretary of State Tony Blincoln also called on global companies to cut off ties with companies that support Myanmar’s military.
However, as POSCO Steel Sheet unified its local business sites with Myanmar POSCO C&C last year, it is likely to be difficult to conclude as soon as possible. POSCO Steel Sheet liquidated after investing in-kind assets and liabilities of Myanmar POSCO Steel, a galvanized steel sheet manufacturer, to Myanmar POSCO C&C in December of last year.
Another subsidiary of POSCO POSCO International (047050)Myanmar’s gas field business was also on the cutting board. POSCO International signed a contract with the Myanmar State Petroleum and Gas Company (MOGE) in 2000 to develop offshore gas fields in the northwest of Myanmar to sell gas. The Myanmar gas field is 51% owned by POSCO International.
POSCO International has emphasized that it is not directly related to the military, and that Myanmar gas field proceeds are credited to the Myanmar state-owned bank. However, it could have an impact on POSCO International as it is putting pressure on the total of French energy companies that are conducting gas field projects in cooperation with MOGE, mainly by human rights groups.
‘Justice for Myanmar’, a Myanmar civic group, claimed that “recently, the Myanmar military has MOGE and other government agencies under military control.”
An official from POSCO International said, “During the gas field business for more than 20 years, the Myanmar government has not only the military but also the democratic government,” he said. “It is difficult to stop the business due to the change of the government.”