In mid-January 2008, Baosteel took a significant step towards the development of downstream industries. A subsidiary company named Baosteel Metal Company was officially set up as a holding company with the aim of combining and developing all steel-consuming industries under Baosteel Group. The foundation of Baosteel Metal symbolizes that Baosteel has been beginning to strategically reconstruct its business structure and move towards a steel-consuming products manufacturer.
So far, the key businesses of Baosteel Metal have been clarified. Steel structure, auto-parts and metal packing are the major development directions for the current and in the near future.
Steel structure is an existing business under Baosteel. Currently, there are major three manufacturing subsidiary companies engaging in project designing, steel structure production and project construction. They have been participating in several domestic famous projects such as Beijing National Stadium (Bird's Nest/Olympic Stadium), new office tower of China Central Television Shanghai, Jinmao Tower, etc. It's estimated that the steel structure market in China is around 20-30 million metric tons per year and the growing trend is apparent. On the base of current achievements and reputation, Baosteel plans to become the biggest steel structure designer, makers and constructor in China.
In auto-parts industry, Baosteel Group approved several feasibility reports and has been setting up some new auto part projects at an unprecedented speed concerning auto transmission system, chassis, wheels and other related parts. So far, there are over 5000 auto-part enterprises with market scale over RMB 500 billion ($70 billion). This scale is expected to reach RMB 800 billion ($111 billion) in 2010. Furthermore, accompanying with technological improvement, 70 percent of world's auto-parts corporations directly purchase products from China. However, due to increasing costs, most local auto-parts companies are facing operation pressure. Baosteel aims at this market and wants to fully making used of the costs advantages of steelmaker.
As to the metal packing business, the current business is mainly within the range of packing steel strips for the steel coils. According to the strategical development plans, this series of steel strips would be introduced and attempted to use in more industries in future.
Baosteel Metal is not an ordinary subsidiary of Baosteel Group. Its setting up was approved by China's Ministry of Commerce for it's not a simple local company in Shanghai but a nation-level company. In other word, to some degree, it can be seen as a big enterprise under central government's direction. And, Baosteel Metal is planned to go public in 5 years. It indicates Baosteel's resolves to strive for becoming a steel-based products manufacturer.