POSCO International's Head of Green Industry Business Lee Young-woo, seventh from left, poses with Opole Province Marshal Andrzej Bula, sixth from left, and Korean Ambassador to Poland Lim Hoon-min, eighth from left, during a groundbreaking ceremony for the company's PI-PEM plant in Brzeg, Poland, Tuesday (local time). Courtesy of POSCO International
POSCO International began the construction of its new factory in Poland to boost the company's local manufacturing capacity in Europe for a key part of its eco-friendly vehicles, which are now in high demand worldwide, the Korean auto part maker said Wednesday.
POSCO broke ground on Tuesday local time for the new traction motor core manufacturing plant, POSCO International Poland e-Mobility (PI-PEM), in Brzeg, Opole Province.
Opole Marshal Andrzej Bula, Brzeg Mayor Violetta Jaskolska-Palus, POSCO's Head of Green Industry Business Lee Young-woo and Korean Ambassador to Poland Lim Hoon-min joined a ceremony to celebrate the start of construction.
The plant, being built on a 100,000-square-meter site, is scheduled for completion by mid-2025.
Upon completion, it will begin supplying 1.03 million traction motors to Hyundai Motor Group for the carmaker's European electric vehicle production.
POSCO said the new plant will be able to manufacture 1.2 million traction motor cores per year until 2030 and will attract major electric vehicle (EV) makers in Europe for supply deals, given the capacity.
The new plant is the latest addition to POSCO's overseas manufacturing bases, covering its key global market regions of East Asia, Southwest Asia, North America and Europe.
The overseas bases help the company bypass tariff risks that are increasing around the world due to a wave of trade protectionism.
POSCO currently runs plants for the EV traction motor core part in Mexico, India and Korea's Pohang, North Gyeongsang Province, and Cheonan, South Chungcheong Province.
Once the Polish plant is up and running, the company expects its network of manufacturing bases worldwide will be able to produce 7.5 million traction motor cores every year until 2030 and claim a 10 percent share of the global market for the auto part.
"Having another manufacturing plant in Europe in addition to Asia and North America means a lot to the company," a POSCO official said.
"We hope the plant will get us to form new partnerships with European carmakers and allow us to rise as a global auto part developer for eco-friendly vehicles."
POSCO's manufacturing capacity expansion comes as demand for eco-friendly vehicles has been rising in Europe.
According to the European Automobile Manufacturers' Association (ACEA), sales of hybrid vehicles on the continent in 2023 registered 3.41 million, a 28 percent increase from the previous year.
Figures for EVs showed a similar rise, according to ACEA.
The Korea Trade-Investment Promotion Agency predicted that EV sales in Europe will rise to 5.4 million by 2025 and over 10.6 million by 2030, noting the European Union's stringent carbon neutrality policies resulted in a ban on the sales of internal combustion engines starting in 2035.