Shanghai-based Chinese chemical company Baosteel Chemical Co., Ltd (Baosteel Chemical), a subsidiary of China's largest steel group Baosteel Corporation, has announced that it has signed an agreement with Sichuan Province-based Dagang Iron and Steel Co., Ltd for investments in two coal chemical production projects in Sichuan. These are the first investment by Baosteel in Sichuan Province.
Baosteel Chemical is the largest coal chemical enterprise in China. According to the agreement, it will set up a joint venture with Dagang Iron and Steel subsidiary Daxing Resource Co., Ltd (Daxing Resource) with an overall investment of RMB 120 million ($18 million). The JV named Daxing Baohua Chemical Co., Ltd (Baosteel Chemical, 45 percent; Daxing Resource, 55 percent) will produce 150,000 mt of coal tar per year after commissioning. Production is planned to be launched in the second half of 2012.
In addition, the two parties will also establish another joint venture called Baohua Carbon Black with an annual production capacity of 40,000 mt of carbon black. For this program, Baosteel Chemical and Daxing Resource will invest an aggregate of RMB 100 million ($15 million), with Baosteel Chemical holding a 55 percent stake and with Daxing Resource holding a 45 percent share.
Dagang Iron and Steel produces hot rolled ribbed steel bars, round steel bars, steel rods, coal chemicals and industrial oxygen.