The steel industry is a vital material industry in many industrial activities with great forward effect. However, the steel industry is energy intensive, which requires more than double the energy cost of general manufacturing industries. Additionally, there are many problems borne by the capital-intensiveness of its production facilities, the high transportation cost of materials and products, and inflexibility in production volume adjustment. Therefore, knowledge competitiveness is required more than any industry in developing a wide range of demand, promoting the efficiency of production systems, reinforcing quality management and design, and the rapid analysis of international market environments.
The demand for steel in Korea has been reduced due to the economic depression after the Foreign Currency Crisis. However, it has slowly risen since the end of 1999. Nevertheless, the factors such as global oversupply, continuous depression in the domestic market requires restructuring of the industry, elimination of inefficient factors, and promotion of productivity and profitability. In terms of production cost, labor costs have increased to 7.3 percent in 1997. Knowledge management costs including outsourcing costs, research and development (R&D) costs, and insurance cost barely reaches one percent. Although efforts have been taken to promote international competitiveness through developing new high-tensile steel, technologies, and techniques, the technology to produce high quality and high value steel is still at 90 to 95 percent of technologically advanced countries.
The global steel market is prospected to grow by 1.6 percent annually, led by developing countries. Closure of old and inefficient facilities would help increasing the national competitiveness of Korea. The global steel industry is being restructured through mergers and partnership between companies. Moreover, the steel industry is evolving to promote environmentally-conscious productivity and efficiency, improve quality, and expand automation.
In order to reinforce the knowledge competitiveness of the steel industry in Korea, the following measures should be taken: Promoting the high value industry through the advancement of new products and production structures, such as high function steel. Enhancement of R&D and technology through cooperation between industries, universities and research institutions. Strategic partnerships with domestic and international companies from procurement of resources, joint use of facilities, to sales. Strengthening information corresponding to diversification.
Additionally, it is also necessary to create new demand and strengthen existing markets to solve problems of oversupply, and to establish reasonable restructuring, environmentally-friendly production structures, and efficient logistics and delivery systems.
철강산업의 지식경쟁력 강화방안(Plans to strengthen the knowledge competitiveness in steel industry)
|Series Title; No||KIET 산업경제|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Manufacturing|