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POSCO is a great example of the power of the "gung-ho" spirit. In the late 1960s, a few young men were determined to build an iron and steel works on a sandy field near Yeongil Bay on Korea's east coast. They pushed for what seemed an impossible project, eating bowls of rice dusted with fine sand at each meal. They even pledged to jump into the East Sea if they weren't able to succeed.
A considerable number of the country's modernization achievements were the outcome of this kind of determination. These men valued the "can-do" spirit more than any rational or logical considerations. Of course they made some inevitable mistakes, but nowadays people refer to their achievements as legendary or miraculous.
Forty years later, in summer 2007, POSCO is dreaming of another miracle on the east coast of India, on the Indian Ocean. The corporation plans to build an iron and steel works, larger than its plant in Pohang, in Paradip in the Indian province of Orissa with an investment of US$12 billion. It's a massive project aimed at surviving the ever-fiercer competition of the globalized era, by securing a beachhead in India, the largest market in the 21st century.
POSCO used to be optimistic about its Orissa Project. The corporation was proud of the mythology of Pohang and trusted the Indian government's promise of full support. It never suspected that India, which urgently needs foreign investment, would seemingly abandon POSCO.
Nonetheless, the project has now turned into a cause of great trouble. In two years POSCO hasn't even been able to secure the land to build the plant, since about 12,000 local residents have opposed the project out of fear that their homelands will disappear. It's still unknown when the Indian government will realize its promise to grant POSCO mining rights to a nearby iron ore mine. Meanwhile Indian media outlets seize every opportunity to bash the Korean company. Some people say that POSCO is under the spell of an Indian curse that turns minor things into big problems and big things into nothing.
Recently POSCO's Korean employees have been leaving India one after another. Its staff of about 30 Korean workers has dwindled to 17, with six more planning to return home soon. In early July, the Financial Express, an influential Indian business paper carried a story headlined "POSCO may return to Korea." POSCO immediately denied the article. "The withdrawal of some Korean employees reflects our long-term strategy in India," the company said. But it shows what kind of trouble POSCO is in. Although the atmosphere soon turned favorable again in India, it seems highly likely that POSCO will postpone yet again a ground-breaking ceremony tentatively slated for October.
Watching POSCO fight this uphill battle, we are reminded of the country and businesses in the globalized era. In this era, we are concerned only about Korean businesses leaving for foreign countries. But from the standpoint of these businesses, some foreign countries that companies believed would welcome them with open arms are reluctant to accept them after all. These companies are also coming to grips with a reality in which it's harder and harder to earn profits. It seems just as difficult for businesses to live away from home.
POSCO is not an exception. Many foreign companies have rushed to woo the Chinese market and its population of 1.3 billion. But they are leaving China one by one, because Chinese enterprises that have grown rapidly with government support dominate more than 70 percent of major domestic markets. The newcomers should have been prepared for this when they set up shop in China in the first place. Some people say POSCO is having a hard time in India because of the influence of Tata Steel, India's largest iron and steel corporation, and Lakshmi Mittal, the Indian-born steel king.
But we can't give up at this point, can we? The gung-ho spirit is not all-powerful, but we expect POSCO to display its legendary determination again in India.
This column was contributed by Lee In-yul, the Chosun Ilbo's correspondent in New Delhi.
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