#South Korea #Ulsan #Korea Zinc #Onsan Smelter #Efficiency Improvement

Korea Zinc's Onsan Smelter Rationalization Project

Korea Zinc, South Korea's leading non-ferrous metal manufacturer, has recently announced the completion of its ambitious Onsan Smelter Rationalization Project. This project, which ran throughout 2024, aimed to enhance the competitiveness of its operations at the Onsan facility, located in Ulsan, South Korea. The completion of this project is not just a milestone for the company, but also a strategic move that is expected to significantly boost its operational profits, surpassing earlier projections made in its business plan.

The initiative focused on several key areas: refining operational processes, improving energy efficiency, and strengthening cost management measures. These enhancements are designed to result in substantial financial gains while ensuring that the smelter remains competitive in a challenging market.

Korea Zinc has achieved an impressive record of profitability, boasting 99 consecutive profitable quarters since 2024, with an annual operating margin of around 10%. However, the firm faced numerous challenges in 2024, including turbulence from the ongoing conflict in Ukraine, rising energy costs, and declining treatment charges that inflated raw material expenses. As a result, the company adopted a conservative projection of KRW 6.828 trillion in sales alongside KRW 407.8 billion in operating profit for the year, which reflects a 6% operating margin — notably lower than its historical average of 12.2%. To counter these challenges, Korea Zinc’s management implemented various strategies, including the Onsan Smelter Rationalization project.

Under the guidance of Chief Smelting Officer President Tae-Woong Jung, this comprehensive project involved the participation of all employees, from senior executives to workers on the frontlines. Jung's direct involvement was evidenced by his presence at the smelting facility for several days each week, facilitating close cooperation between the operational site and headquarters.

Key initiatives that emerged from this project included the establishment of a dedicated team of 23 personnel devoted to process rationalization. Furthermore, task forces were created for optimizing operations and managing costs effectively. The formation of cross-functional teams allowed for collaboration in various areas, including materials management, technology implementation, production oversight, and safety protocols. Moreover, the company's logistics system saw vast improvements, leading to a dramatic reduction in related costs, while annual lead production was increased from 420,000 tons to 450,000 tons.

The project was characterized by a robust emphasis on teamwork and collaboration, resonating through the company's culture. Korea Zinc's leadership attributes its success to the ongoing trust and cooperation among its employees, notably highlighted by a remarkable 37-year timeline without any labor disputes. As the domestic steel industry grapples with international pressures, Korea Zinc remains committed to advancing its operations and securing its market position. A company representative expressed concerns about challenges ahead in the non-ferrous metals sector, particularly for 2025. However, they affirmed the company's resolve to maintain both its operational competitiveness and exceptional performance, something that cannot be replicated by speculative capital. In conclusion, the Onsan Smelter Rationalization Project not only positions Korea Zinc for heightened profitability but also reinforces its dedication to innovation and operational excellence in the evolving landscape of the non-ferrous metallic industry.