Qingdao Pohang Stainless Steel Co., Ltd., an 80:20 joint venture established in December 2002 with Qingdao Steel in Shandong Province, will produce up to 150,000 tons of cold-rolled stainless steel annually. Ground was broken for the US$130.7 million QPSS venture in April 2003, and the project is slated for a December 2005 completion.

POSCO Suzhou Automotive Steel Processing Center Co., Ltd., a wholly owned subsidiary established in August 2003 in Jiangsu Province near Shanghai, will produce up to 200,000 tons of automotive sheet steel annually. Ground was broken for the US$20 million project in September 2003, and completion is scheduled for May 2004.

The launch of POSCO China Holding Corporation on November 7, 2003 marked the first concrete step of a growth strategy CEO Ku-Taek Lee has advocated since he took the POSCO helm in March 2003. POSCO China is expected to significantly boost the competitiveness of our present and future investments in China, streamlining management of our local ventures and enabling us to leverage our technical and managerial leadership to cost-effectively deliver the advanced technology and quality steel local customers demand and expect.

We launched two other major local projects in the second-half of 2003 that will increase the total value of projects we are involved in from US$838 million today to nearly US$2.25 billion through 2006. On August 19, 2003, we signed an agreement with Benxi Iron & Steel forming a US$664 million 10:90 joint venture capable of producing 1.8 million tons of cold-rolled steel coil and galvanized sheet annually. Located in Liaoning Province, BX Steel POSCO Cold Rolled Sheet Co., Ltd. will be formally incorporated in April 2004 with completion scheduled in May 2006.

September 8, 2003 marked another milestone in our international operations when we received approval to add a stainless steelmaking plant and hot-rolling mill with a combined annual capacity of 600,000 tons to our existing joint venture in Zhangjiagang. Our first upstream production project to date outside Korea is tasked with providing a stable supply of hot-rolled stainless steel coil to ZPSS and QPSS. The US$744 million project is scheduled to come online in December 2006, eliminating the current domestic stainless steel shortage as it provides local processors with cheaper, higher-quality feedstock.

Manufacturing Beyond China
Second only to China in both population and economic growth, India figures prominently in our global production strategy. Pushing ahead with an early advance into this emerging market, we aim to gain investment experience by building a local presence with small-scale processing centers that will allow us to gauge local market trends in the near-term, gradually expanding as demand grows. In Asia, Vietnam is challenging China's leading growth rate with high-single-digit rates of its own. We intend to aggressively compete for major upcoming national projects, leveraging the long-standing relationships we've forged with the government and local steel-makers.