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Steel industry undergoes key changes in 2006

(Xinhua)
Updated: 2006-12-31 14:20

REGROUPING OF COMPANIES

In order to improve status on the international arena, China's steel companies not only resorted to relocation, but also to consolidations as well asmerger-and-acquisitioncampaign.

Tangshan Iron and Steel Company, located in the northernHebeiProvince, has taken over two local steel mills, the Xuanhua Steel and Chengde Steel, and thus risen to be China's second largest steel maker next only toShanghai-based Baosteel.

The new company has also teamed up with the Shougang Group inBeijingin building a new steel production base in Caofeidian in Hebei Province with an annual output capacity of 15 million tons.

Anshan Iron & Steel Group in northeast China'sLiaoningProvince, also regrouped with Benxi Iron & Steel Company, a local steel company inLiaoning's Benxi City in 2004.

UPGRADING PRODUCTS

China's steel industry also tries to optimize the products structure as a way out in the fierce global competition by shutting down small and outdated plants and encouraging innovation.

North China's Hebei Province will close 26 small and outdated steel production units by the end of 2007 and the first shutdown was started in Tangshan at the beginning of this month.

Handan Iron and Steel Corp. has also acquired some cutting-edge equipment, including a 1.3 million-ton cold-rolled sheet steel production line, which can help produce more fine steels and thus improve their competitiveness significantly.

Zhang Guilei, general manager of Tangshan Jianlong Iron and Steel Group said "the competition in steel industry, to some extent, is a race of innovation. Companies will win only when they speed up its innovation and improve techniques."