Dangjin County’s New Hope

The bankruptcy of Hanbo Iron and Steel in 1997 didn’t stop the strip mill from operating, but as the exchange rate of won against dollar rose, the import cost of the mill’s raw material, iron, went up by three times, forcing the mill to shut down in July, 1998.

The mill’s manager, Park, had to let go all of his coworkers, and he left Korea himself in 1999 in order to forget the sorrow of business survival. Already recognized as an expert overseas, he was scouted by ISPAT Industries of India and LPN Iron Company of Thailand. However, as soon as Park received an offer from INI Steel regarding a project to reopen the mill, he came back to Korea.

“The payroll here is almost half that of foreign iron companies. Money is not why I came back. I was the one who built this mill and operated it. That is enough reason for me to come back to join this project to reopen it,” Park said.

Hanbo Iron and Steel, once considered the main culprit of the financial crisis of 1997, now has new owner, the INI Steel-Hyundai Hysco consortium of the Hyundai group, and now the company is full of energy. Workers in the iron mill are willingly putting in the effort to make the mill a success. The mill had been treated as a white elephant because the sale process had been delayed for seven years. But now, under the new owner, workers want to make the company into a solid foundation of the national industry once again. Plans for re-opening the Hot Strip Mill One in sector A in July 2005 are complete. Hot Strip Mill Two in sector B, which had been abandoned in the middle of its construction, is scheduled to start operation in late 2006.

Construction in sector B was stopped after the collapse of Hanbo. But the hot and cold strip mills have been well maintained, and 90 percent of their construction is complete. INI Steel thinks it is possible to begin full operation soon. Only the Corex system, which produces liquid iron, is still under consideration based on potential profitability.

However, in order to normalize the mill’s operation and activate the local economy, there are challenges to solve.

“We have two big tasks. Recruiting enough workers to operate the mills and providing an appropriate educational environment for their children,” said deputy general director Kim Tae-young of the Dangjin iron mill.

Dangjin is a county with a population of 120,000, but many of its young workers left after the Hanbo collapse, which makes it hard to hire enough local workers now. Not only that, if former workers, who moved to nearby steel companies, try to come back, it will halt the operation of other mills.

“We are thinking of measures to build a high school to attract the young, and we hope they will provide the area with human resources in the long run,” Kim said.

Meanwhile, Dangjin is expecting such measures will provide new energy to the enfeebled local economy that has continued since the Hanbo scandal. “Dangjin iron mills will greatly serve to develop the county’s economy. We already gathered a support team for the iron mills led by our deputy county councilman. We are ready to cooperate on any administrative matter,” County governor Min Jeong-ki said.

Do-Young Kim sunjung71@hotmail.com