311_Posco steel furnace.
(photo credit: Posco company website)
Pohang Iron and Steel Company (POSCO), the world’s second-largest steelmaker by market value, has agreed to participate in a joint Israei- Korean industrial R&D program.
Dr. Eli Opper, the chief scientist at the Industry, Trade and Labor Ministry, on Sunday signed a R&D cooperation agreement with POSCO CEO Chang Jeon-Yong that will facilitate the company’s investment in projects in Israel.
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POSCO is the first East Asian company to participate in a joint R&D agreement under the auspices of the ministry’s Industrial Cooperation Authority. Eighteen other foreign corporations already participate in ICAadministered R&D programs, including Abbott Laboratories, Intel, Oracle, IBM, General Electric, Microsoft, Deutsche Telecom, Merck & Co. and Hewlett-Packard.
POSCO was founded in 1968 as part of a government-private sector initiative by the South Korean government to build a domestic steel industry to supply finished steel to the country’s developing shipping and automotive industries. The company reported $33 billion in global sales in the last fiscal year.
Under the new agreement, the Office of the Chief Scientist will help the company locate Israeli technologies that meet its needs, and provide financial support to fund the R&D required to complete development and commercialization of the technological know-how.
The chief scientist under the authority of the ICA may also provide financial grants equal to up to 50 percent of the total approved corporate R&D expenditures as well as lend research equipment, and provide technical and regulatory advice and marketing assistance.
According to the Office of the Chief Scientist, the goal of the ongoing R&D cooperation program is to encourage increased foreign corporate investment to benefit Israeli society as well as open overseas markets for Israel-designed products. A financial return on the government’s investment is also possible in the event of a successfully commercialized research breakthrough.
“When a government-assisted R&D project results in a commercially successful product, the company is obligated to pay royalties, which will be used to fund future grants to encourage and support other industrial R&D programs. In general, royalty payments are 3%-3.5% of the total annual revenues derived from the sales of a developed product which R&D was supported by OCS grants,” according to the Office of the Chief Scientist’s website.
POSCO participation in an R&D agreement was greatly encouraged by the Korea-Israel Industrial R&D Foundation, which was created by the two countries’ governments in 2001. The foundation has taken a lead role in developing and deepening ties between Israeli and Korean scientists, government officials and business leaders.