China's Hebei Steel Group confirmed on March 3 that it is currently negotiating with CITIC PACIFIC, a Hong Kong-listed company whose main businesses are in special steel production and iron ore mining, for the purchase of Hebei Province-based special steel producer Shijiazhuang Steel and Iron Co., Ltd. (Shigang). The outcome of the talks is expected to be known within one month.
Shigang produces special steel for the automotive industry, with an annual capacity of 2.6 million mt. In November 2005, CITIC PACIFIC purchased a 65 percent stake in Shigang for RMB 1.48 billion ($216.7 million), with the remaining 20 percent and 15 percent stakes held respectively by the Hebei Province Assets Supervision and Administration Commission and by Shigang's management.
In 2009, Shigang produced 1.84 million mt of crude steel, 1.75 million mt of finished steel, registering a sales revenue of RMB 6.68 billion ($977.98 million), pre-tax profit of RMB 560 million ($81.99 million) and net profit of RMB 220 million ($32.21 million). At the same time, the company exported 143,000 mt of steel for the automotive industry, generating revenues of $73.34 million.