November 25, 2024

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Site of the first and upcoming second plant for drive motor core production in Ramos Arizpe, Mexico (Posco International)

Posco International's new president, Lee Kye-in, has initiated the global expansion of the traction motor core business by establishing operations in Poland and Mexico as his inaugural strategic move.

At a board meeting on Friday, the trading arm of the Posco Group authorized the establishment of a new facility in Poland and its second plant in Mexico, a big step toward its output goal of 7 million traction motor cores a year by 2030. Motor cores are a central component in electric motors and traction motors are the motors used to drive the vehicle forward.

As a result, the company has now established a production network for motors spanning five countries -- South Korea, Mexico, Poland, China and India.

The Polish production facility, which will be the European hub for the motor core business, will be situated in Brzeg, southwestern Poland. Brzeg's strategic location is adjacent to key European automaker production sites in Germany, the Czech Republic, Slovakia and Hungary, which would offer advantageous prospects for local procurement.

After commencing construction in June on a sprawling 100,000-square-meter site, the Polish factory is scheduled for completion by May 2025.

Scaling up according to production projections, the facility targets an annual output of 1.2 million traction motor cores by 2030. Posco International aims to secure orders from prominent European clients, building on an order of 1.03 million motor cores from Hyundai Motor in January.

Simultaneously, the board greenlit the construction of a second plant in Mexico, augmenting the Mexican production footprint. Construction for the second plant is slated to commence in May with completion aimed for March next year.

Located near the initial facility completed in Ramos Arizpe last October, the Mexican plant aims to reach a joint annual production capacity of 2.5 million units for both plants combined by 2030. Particularly, the second Mexican plant will cater to the demand for 2.72 million motor cores from Hyundai Motor Group Metaplant America, the first dedicated full electric vehicle manufacturing facility in the US, while also meeting the local production needs of North American clients.

By establishing production hubs across three continents -- Asia, North America and Europe -- the company fortifies its ability to navigate logistics challenges and trade barriers. Simultaneously, it lays the groundwork to emerge as a pivotal component manufacturer for eco-friendly automobiles, aligning with customer preferences and market demands.

"The company's future trajectory is to become a platform entity, fostering synergy across diverse businesses and incubating novel ventures," Lee said. The new president also underscored the imperative of innovating the business model through digital transformation to address customer needs effectively.

By Kim Hae-yeon (hykim@heraldcorp.com)