South Korean steel and electric vehicle (EV) battery materials producer Posco Group has agreed to establish a strategic partnership with local robotics manufacturer Neuromeka Company Ltd, to help improve the operational efficiency of its steel plants, according to local reports.

Posco is under increasing pressure to enhance the efficiency of its steel production facilities, as competition from Chinese producers continues to rise. Last month the steel-maker announced it was shutting down one of its steel wire rod mills in Pohang due to a supply glut as imports continue to rise.

Posco’s partnership with Kosdaq-listed Neuromeka will focus on developing and introducing automation, including collaborative robots, and artificial intelligence at its plants. A company official said Posco has already automated some manufacturing processes at its plants, including the transportation of molten iron, but the steel industry as a whole typically has low levels of automation compared with high-tech industries such as electronics.

Through its partnership with Neuromeka, Posco also aims to establish a new growth engine. The steelmaker plans to take a 3.8% stake in Neuromeka through the purchase of KRW10bn worth of convertible bonds which it plans to convert into shares.