Chinese steel giant Baosteel Group has stated that it plans to move 30 percent of its production capacity out of Shanghai within the next five years, as reported by China's state-owned Xinhua News Agency.
Company chairman Xu Lejiang said Baosteel will move 5.8 million mt of iron production capacity and 6.6 million mt of steel output capacity to facilities in the southern Chinese province of Guangdong and in the Xinjiang Uygur autonomous region in western China by 2017.
"The partial relocation is a self-initiated adjustment and also a coordinated transformation between the city, industry and enterprise," Mr. Xu stated, while adding that Baosteel will focus on producing more high-end products and developing new strategic areas. He also said that the entire transformation period in question is expected to be characterized by low profitability.
Baosteel estimates that the removal of production capacity outside of Shanghai will reduce annual energy consumption in the city by 3 million mt of standard coal equivalent.