On September 13, Baosteel and Handan Steel inked an agreement in Shanghai to set up a new joint venture facility in Hebei province, which will have an annual capacity of 4.6 million metric tons of mostly high-end steel sheet products. The mills had revealed their intent to move towards this joint venture in May 2007.
The new plant, to be built on the western side of Handan Steel's current manufacturing base, will include a comprehensive steel material stock yard with 10 million metric tons of annual in-and-out; two big coking stoves; two sintering devices of 360 square meters; two blast furnaces of 3,200 cubic meters; two converters of 250 metric tons; an assembly of continuous casting and refining devices; a 2,250 mm HR production line and a 2,030 mm CR production line.
The target markets of the joint venture are pipe-making, vehicle, household appliances and other high added value industries. The total investment budget is around RMB 19.4 billion ($2.58 billion), to be undertaken equally by the two parties.
The joint venture has been referred to as the beginning of a probable consolidation between Baosteel and the eight million mt per annum-capacity Handan Steel.