The POSCO Strategy

Hogan was an economist who spent his career studying the steel industry, and he wrote this account of Pohang Iron and Steel Company, the Korean producer founded in 1968 that became one of the largest and lowest-cost steelmakers in the world. The book covers the company's founding, its construction programme and its competitive position around 2000.

The central claim concerns the advantage of building new. POSCO was created from nothing on greenfield sites at Pohang and later Gwangyang, financed substantially with funds from the 1965 normalisation settlement with Japan and with Japanese technical assistance. Because it had no existing plant, it could install the largest and most modern equipment available and lay out integrated works for efficient material flow, while American and European producers were adding to plants laid out decades earlier. Hogan argues this explains the cost gap more than labour rates do. He also covers the role of Park Tae-joon's management, the state's role as owner and protector of the domestic market, and the eventual privatisation.

Hogan writes as an industry economist, so the book is heavy on capacity figures, process technology and plant configuration and lighter on political economy. Readers wanting the developmental state argument should go to Amsden or Wade, who treat POSCO as a central case.

The reference has not verified every detail of the book's contents beyond this. It also stops before China's capacity expansion transformed global steel economics after 2003, which is the single most important development for any judgement about POSCO's position.