Byeong-Og Yoo: My name is Byeong-Og Yoo. I’m Head of Green Infrastructure business team, and I’d like to give you an overview of our business plan. So in 2023, this is — in 2023, our focus was on the merger of POSCO International and POSCO Energy to generate more synergy there. In 2024, our goal is to expand on that and to realize the potential synergies, especially in energy because we are able to build out a complete LNG value chain. That adds a lot of advantage to us. And so we are able to address a lot more volume, and so that bodes well for growth potential. So that’s the growth that we’re seeking this year. I can’t give you any numbers right now, but we will be at least where we were in 2023, if not more. POSCO E&C due to market circumstances and construction circumstances are not — the prospects are not bright.
And so year-on-year, we’re seeing some lackluster performance here. And I don’t think we’re going to see too much improvement this year. And this is because of raw materials price hikes as well as just overall cost increase. So we are seeing the peak point subside a little bit, but some of the construction starts that we had previously contracted, they will begin in the year 2024. But because of these cost increases, I think performance-wise, earnings-wise, we might see a little bit of a slip compared to 2023. We will do everything in our ability to manage our costs so that we don’t slip by a big margin. So we will continue to pay attention to these factors. In green materials because of the price fall in metal, PPLS and Hy Clean Metal, all of these companies experienced inventory impairments.
Starting this year, we believe the impact of the raw materials price declines last year were fully experienced and the impact of that has now subsided. So I believe we’re going to hit black ink this year. And this is not just me speaking, but the entire market believes that the EV battery materials market is going to experience a lot of difficulty this year. So compared to 2022 and 2023, where we had very dramatic growth, we will not meet that kind of growth rate, but we will continue to take orders and continue to seek growth. At PPLS, plant #1 was completed last year, and we have something going on in Argentina, which will complete if we can be quick maybe by the end of this year, at least by the first quarter of next year, it will go into operation.
So up to that point, there’s going to be ramp-up costs, initial costs involved in ramping up a plant. So some of the losses we will experience in the next year or so is inevitable. I want you to understand that.
Seung-Jun Kim: I’m from the finance office. My name is Kim Seung-Jun. So business plan in the steel business is what I’ll address. This year, the steel market will be focused on ESG regulations as well as carbon net zero and the major economic blocks that are forming around the world. These will act as constraints but we’re most focused on safety. So last year, we had no major accidents. And we wish to continue to hold on to that number zero this year as well. By cultivating our culture of safety through the application of smart technologies as well as just creating a culture of safety, and we will also create new production systems that will invite more green, eco-friendly, sustainable processes. So decarbonized production, steelmaking as well as bridge technologies and Greenate is our new brand that embraces various decarbonization strategies and mechanisms.
So green products and green materials will be embraced and these will add to our engine of growth. We will innovate our processes so that against competition, we will emerge more competitive. Through digital transformation in the production process, we will apply robots, more machines, automation and also introduce metaverse to create the future platform. So these are some of the strategies that we have in plan, and our prospects for this year, however, the business prospects are not entirely bright as already mentioned, because of the raw materials cost increases as well as price fluctuations that have not yet hit our books. We believe that in the first quarter, we will not be able to make any meaningful dent. But because we will be increasing our prices to reflect — better reflect raw materials price hikes, we will increase strategic product sales.
And these are some of the efforts we will exert in order to improve our profit structure. First quarter will not be easy. But after the first quarter, I hope to be able to report some positive results overall, because our goals are much higher than what we had set last year. We look forward to a more robust year. Secondly, for nickel price, I think that there was some concern expressed about JVs with Chinese businesses. But our portfolio puts a lot of emphasis on being IRA compliant. And so SNNC has some plants that are being built in North America. And for low-grade — low-cost nickel, we are working with Indonesia, and these are for certain markets. FEOC and IRA pose some constraints in doing business with Indonesia. That’s true. But if Indonesia is designated as an FTA-compliant partner, then through shares adjustments as well as different investment mechanisms, we will be able to create agreements that I think will be compliant with the laws.
