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Newsletter from Plant Engineering & Construction Divisionwww.poscoenc.com

POSCO E&C INNOVATION & TECHNOLOGY

POSCO E&C Steps Forward to Strengthen Mutual Relationship with Downer

‘ Global Bridge’, the Connection between Korea and the Philippines

Completion of POSCO’s First Automotive Steel Plant in Southeast Asia

Successful Achievement of 3 Million Safe Man-Hours for Saudi Aramco Project without Lost Time Incident

ISSUE 11

SEPTEMBER2016

POSCO E&C completed construction of CGL which has 450,000 tons of annual production capacity in Thailand on 30th June

Another Successful Completion of CGL in Thailand

Coil signing event by Mr. Ohjoon Kwon, POSCO CEO, accompanied by Mr. Dongchul Kim, POSCO E&C General Superintendent of Plant Division

Completion of POSCO’s First Automotive Steel Plant in Southeast Asia

POSCO E&C held the completion ceremony for POSCO’s first automotive steel plant in Southeast Asia, “Thailand CGL (Continuous Galvanizing Line)” with 450,000 tons of annual production capacity on 31st August, 2016. Over 250 people attended the ceremony, including Mr. Ohjoon Kwon, POSCO CEO, Mr. Dongchul Kim, POSCO E&C General Superintendent of Plant Division, Mr. Tanasak Patimaprakorn, Deputy Prime Minister and Minister of Foreign Affairs, Mr. Atchaka Sibunruang, Minister of Industry, Mr. Somsak Suwansujarit, Rayong Governor, Mr. Kwangil Noh, Korean Ambassador of Thailand and employees of local clients.

As a main technical leading company, POSCO E&C has performed total engineering, mechanical erection and performance guarantee for this EPC project, leading a consortium composed of POSCO E&C, POSCO Engineering and POSCO ICT. By completing the plant, POSCO E&C proved its optimized total EPC solution to clients with its technical capability.

The driving force behind the completion in time is POSCO E&C’s numerous construction experiences of CGL in Korea, China, India, Mexico and other countries. The completed plant consists

of 450,000 tons of Continuous Galvanized Line, 200,000 tons of Recoiling Line and Coil Packing Line for producing premium automotive steel sheets. Thailand CGL Steel Plant has been completed after 21 months from the construction commencement in 2014 and met the client’s satisfaction.

The process is used to produce CGI (Continuous Galvanized Iron) going through the following procedures: producing full hard material first through pickling and rolling in the PCM (Pickling and Cold Rolling), heating them to a certain temperature, rolling them under the cold temperature, removing any stress, granting required ductility to them, deposit-plating them through the hot dip pot and controlling the amount of plating adhesion with an air knife.

Through the history of galvanizing line in POSCO group and abroad, more than 20 hot dip galvanizing lines are in operation throughout the world with satisfied customers successfully producing galvanized sheets, 55% Al-Zn coated sheets and 90% Al coated sheets. POSCO E&C has excellent experience especially in automotive steel plant including the Gwangyang Steelworks in Korea (500,000 tons/year), India (450,000 tons/year),

Mexico (500,000 tons/year) and China (450,000 tons/year).

With the completion of the CGL, POSCO expects to provide the world’s best-quality products with the best services, greatly satisfying the demand of global automobile companies. “Thailand is the hub of AEC (ASEAN Economic Community) that was launched last year, and is positioning itself as the automotive production base as well as the center of the home appliances industry in Southeast Asia,” Mr. Ohjoon Kwon, POSCO CEO, spoke during the welcoming speech on the ceremony day. “With today’s completion of Thailand CGL, POSCO will be devoted to becoming a total solution partner that provides differentiated products and customized solutions in Thailand, while also creating value and growing with our clients.”

Through various experiences of CGL projects, POSCO E&C already secured its EPC management ability and engineering technology. Especially, the company set up technology simulation model of CGL such as calculation of equipment capacity and investment cost from POSCO Gwangyang No.4 CGL experience in 1990s. Recently, POSCO E&C’s CGL construction technology has been recognized more globally.

02 ISSUE 11 - SEPTEMBER 2016 POSCO E&C Total Solution Provider

POSCO E&C Total Solution Provider ISSUE 11 - SEPTEMBER 2016 03

POSCO E&C announced that it recorded 3 million man-hours without any accidents or injuries at the Sulfur Railcar Loading Facility Project developed by Saudi Aramco on August 17th.

Since November 1st 2015, POSCO E&C has started the construction works in earnest and has executed about 40% of the whole work until now. The Mechanical Completion dates for Wasit and Berri Plant sites are targeted on December 2016 for Wasit and March 2017 for Berri, respectively.

One of representatives in POSCO E&C said, “It is quite meaningful for POSCO E&C to conduct the work without lost time incidents under the harsh circumstances. Saudi is regarded as one of the most difficult places to work due to challenging working conditions including sandstorms of deserts and heat waves. However, we, POSCO E&C, have exerted our best efforts in overcoming these poor conditions based on high level of our safety management. While we are facing many difficulties in executing the project, we have been gaining a lot of practical know-hows and lessons.”

On 3rd August, 2016, POSCO E&C entered into Memorandum of Understanding (MoU) with Downer Australia, which is specialized in CHPP (Coal Handling Preparation Plant) of mining industry in Australia, to seek for various project opportunities all over the world. POSCO E&C has exerted every effort in entering the Australian market for long since the establishment of POSCO E&C Australia Corporation in 2011. As a result of these utmost efforts, POSCO E&C has developed Adani CHPP and Port & Rail Project and won Moolarben Stage2 OC4 and Underground Project under the mutual cooperation with Downer. In addition, POSCO E&C participated in Bylong Coal Project open tender by KEPCO Australia in collaboration with Downer.

On 1st August, Mr. Brendan Peterson, CEO of Downer ECM, visited POSCO E&C to strengthen mutual relationship, had a chance to be shared POSCO E&C’s track records and its capability and also took a look around one of ongoing projects of POSCO E&C. Mr. Brendan Peterson said, “We hope to expand our cooperative relationship not limiting to mining industry but expanding to other industries in Australia. Besides the Australian market, POSCO E&C and Downer will continue to expand cooperation in many other countries, combining competitive advantage of each company.”

Overall three-dimensional layout of POSCO CISC CGL Plant to be built in Chongqing

MoU Signing ceremony with Downer Australia on 3rd August, 2016

A panoramic photograph of Aramco Sulfur Railcar Loading Facility Project site

Successful Achievement of 3 Million Safe Man-Hours for Saudi Aramco Sulfur Railcar Loading Facility Project without Lost Time Incident

POSCO E&C Steps Forward to Strengthen Mutual Relationship with Downer

POSCO E&C was Appointed as a Successful Bidder for the Project of POSCO CISC Continuous Galvanizing Line

POSCO E&C got awarded from Chongqing POSCO CISC Automotive Steel Co., Ltd., collaborating with POSCO in Korea and Chongqing Iron & Steel Co., Ltd. in China, for continuous galvanizing line. This project is aimed to set production base of automotive steel in Chongqing and then pioneers the automotive steel market in China. The plant capacity is approximately 450,000 tons per annum.

Galvanized steel (GI/GA) is made through the process, in which hot coil steel is pickled, rolled and dipped in a pot of molten zinc. It is used in a wide range of applications because of its exceptional resistance to corrosion and excellent ability to facilitate painting and processing. The facility that produces galvanized steel is called a continuous galvanizing line. Galvanized steel from the line is supplied to three major industry segments: construction, consumer electronics and

automobiles. This Chongqing plant is focused on manufacturing automotive steel, which requires high technology compared to other products. POSCO E&C has proven its capability to build the core components of continuous galvanizing line, including furnace, zinc pot and skin pass mill, as well as pre/post-treatment units at this time.

The project representative of POSCO E&C said, “We have successfully supplied continuous galvanizing lines (CGLs) for the

production of galvanized steel plates, which brought us tremendous acclaim from customers. In particular, our CGLs, which produce steel plates for automobiles, have been supplied worldwide, including Mexico, India, China and Thailand. With those accumulated experiences over years, we are confident to build the world-class CGL plant in Chongqing. Through the successful performance of this project, POSCO E&C hopes to consolidate its prominence in world steel market.”

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‘Global Bridge’, the Connection between Korea and the Philippines

InfraRed-Oven : Technological Advancement for Better Efficiency

04 ISSUE 11 - SEPTEMBER 2016 POSCO E&C Total Solution Provider

CONTACTName HO-SEONG LEE / Director

POSCO E&C Tower 1, 241 Incheon tower-daero, Yeonsu-Gu, Incheon, 406-732, Korea

E-mail lhs@poscoenc.com

Phone 82 32 748 2365

With these characteristics, IR-Oven provides advanced temperature control on high speed products with outstanding energy efficiency. It also provides accurate error detection with an intuitive computing interface for operation. Furthermore, it is easily maintained, which gives client opportunities for cost reduction in maintenance.

With these benefits, POSCO E&C has successfully installed its

IR-Oven to these lines:

- RIST (POSCO Pohang)

- 2CGL (POSCO Gwangyang)

- 4CGL (POSCO Gwangyang)

- 5CGL (POSCO Gwangyang)

- 6CGL (POSCO Gwangyang)

- Mexico 1, 2 CGL (POSCO Mexico)

- INDIA CGL (POSCO Maharashtra)

- China Guangdong CGL (POSCO Guangdong)

Happy Builder, the volunteer group of university students in POSCO E&C, has conducted social contributive activities with the volunteer group of young Filipino people from 13th to 22nd of August in Masinloc, the Philippines.

23 members of Happy Builder and 11 members of young Filipino people participated in the voluntary activity in Bani Barangay, Masinloc, where the construction site of coal thermal power plant by POSCO E&C is located. They

played a key role as a bridge between both countries through the valuable events during the schedule.

The volunteers met the students in Bani middle and high school to educate career exploration and culture of Korea, held ‘Make It Shine Festival’ to cheer the students up for their shining future, and provided educational materials to improve their educational environment.

Ceremony of donating educational materials on 20th August, 2016

Item Old Oven Type POSCO E&C's IR-Oven

Design Reference- 0.83mmt, 150mpm

- 30 ⇨ 60℃- 1.10mmt, 180mpm

- 30 ⇨ 85℃

Module Frame

- Side cooling for Lamp

- Fixed Lamp space

- Module moving to side way for maintenance

- Back Side cooling for Lamp

- Adjustable lamp space

- Module moving to side way for maintenance

Module

Q'tyUnit Capacity

# of LampUnit Length

Four(4)340 kW102 ea/module500 mm

Eight(8)327 kW102 ea/module450 mm

IR-Lamp

Unit CapacityColor Temp.

Life

3,400W> 3,000K2,000hr

3,200W~2,700K5,000 hr at 100% RatedOutput

POSCO E&C would like to introduce its one of the most innovative technological achievements, InfraRed-Oven (hereinafter IR-Oven), which is a new coating dry system for galvanizing line. This advancement has its meaning that it has been achieved by joint development between POSCO E&C and RIST, Research Institute of Industrial Science & Technology.

IR-Oven is designed to emit a radiant heating using multiple Infra-Red Lamps and completely dry coated steel sheets, even if it passes through the system with high speed. Furthermore, IR-Oven is assembled in POSCO E&C’s workshop, guaranteeing its highly optimized quality. With these characteristics, IR-Oven distinguishes itself from other coating drying systems.

Namely, compared to old oven type, POSCO E&C’s IR-Oven has characteristics as follows.

Actual view of IR-Oven during the test in POSCO E&C Workshop