South Korean Conglomerate POSCO Ends Cooperation With Myanmar Military-backed Companies

JAKARTA - South Korean conglomerate POSCO announced on Friday that its affiliate POSCO C&C will suspend a joint venture with a company backed by the Myanmar military.

The world's fifth-largest steel producer has come under fire for its business ties with the Myanmar military regime that seized power in February.

South Korean conglomerate POSCO claims the joint venture, Myanmar POSCO C&C (MPCC), is the only link to the military junta. POSCO C&C has been running the MPCC since 2013 with Myanmar Economic Holdings Limited (MEHL), a conglomerate controlled by the Southeast Asian nation's military.

"We will end the joint venture with MEHL, because the issue (regarding the military coup) has been raised recently," said POSCO C&C in a statement carried by POSCO, "as reported by the Korea Times, Friday April 16.

POSCO C&C owns 70 percent of the shares and MEHL each owns 30 percent of the shares in MPCC. The South Korean company did not specify how they would end the joint venture.

"We hope our steel business will continue to contribute to improving Myanmar's residential environment and revitalizing the economy," added POSCO C&C.

MEHL is one of Myanmar's military entities sanctioned by the United States and Britain. Meanwhile, POSCO has repeatedly said that it has not paid dividends to MEHL since the Rohingya crisis.

There are a total of five POSCO-owned businesses in Myanmar, including gas fields, hotels, rice processing plants and trading companies, all run by its trading arm, POSCO International.

The gas project has also been debated, as it includes Myanmar Oil and Gas Enterprise (MOGE), a state-owned company in a consortium of six international companies led by POSCO.

The project off the coast of Shwe, which is located 500 kilometers from Myanmar's capital, Naypyidaw, is the most profitable of the five projects.

From there, sales of US $ 623 million were recorded in 2020, or about 86 percent of POSCO International's total sales in Myanmar.

POSCO has stated that all businesses managed by POSCO International had been operating for 20 years before the coup carried out in February 2021, when the democratically elected government was overthrown.

Myanmar Coup. The VOI editorial team continues to monitor the political situation in one of the ASEAN member countries. Casualties from civilians continue to fall. Readers can follow the news surrounding the Myanmar military coup by tapping on this link.