SeAH Besteel (SeAH Besteel Holdings), a special steel manufacturer under SeAH Group, is expected to face production disruptions after consecutive fires broke out at its production facilities. SeAH Besteel has had fires every year and even discussed measures to prevent a recurrence with local fire authorities, but another fire occurred a week after those discussions.
According to the steel industry on the 2nd, SeAH Besteel is implementing flexible operations by running facilities at the Gunsan plant in rotation. This is because it has not fully restored the equipment lost in a large fire in the rolling process at the end of Jul. Although the property damage from the fire amounted to only 16.5 million won, restoration is taking a long time because parts for the switchgear (a device that distributes and controls electricity) must be imported from overseas.
SeAH Besteel is alternating the operation of facilities to minimize disruptions to the production schedule, but there is an outlook that disruptions will be unavoidable. The labor union also said, "It is difficult to predict when the large rolling fire accident will be restored, so we judge that there will be a serious impact on production. In particular, it is inevitable that the post-process production will be hit."
This is the second fire this year at SeAH Besteel. On Jul. 9, a fire also broke out on a conveyor belt at the Gunsan plant. There were no casualties, but another fire occurred in just over 20 days. The late Jul. fire occurred about a week after the local fire station visited the Gunsan plant to conduct an on-site inspection and discuss measures to prevent a recurrence.
Fires also occurred at SeAH Besteel's Gunsan plant in Jul. 2021 and Apr. 2022. The 2022 fire also started in the large rolling process, and the damage amounted to several hundred million won.
Production disruptions caused by the fires are expected to weigh on earnings. SeAH Besteel is also under financial pressure this year due to the U.S. steel tariff and the settlement payment of ordinary wages. Provisions for liabilities related to SeAH Besteel's ordinary wage lawsuit amount to 130 billion won. In the first half of this year, SeAH Besteel's sales were 1.04 trillion won, down 5.6% from the same period last year, and operating profit was 27.2 billion won, down 45.6%.