SteelOrbis Shanghai
Shandong Iron & Steel Group Company Limited has in recent days signed a letter of intent for the takeover of Rizhao Steel Holding Group. No information is available as regards the content of the letter, whether from the mills or from Shandong State-owned Assets Supervision and Administration Commission. Insiders have disclosed that the said agreement is just a preliminary statement of intention, and that no substantive scheme has been drawn up yet.
Established in 2003, eastern China-based Rizhao Steel posted 7.75 million mt of crude steel production last year. In the first nine months of this year, the mill produced 6.07 million mt of steel. Meanwhile, the annual production capacities of Jinan Steel and Laiwu Steel, both Shandong Group subsidiaries are 8.14 million mt and 8.63 million mt respectively.
According to the plan of the provincial government, Shandong will establish a large steel base in Rizhao with the capacity of 20 million mt, including a total of 15 million mt of newly-built capacity. The new projects will be constructed in two phases; the first phase will involve the construction of 10 million mt of newly-added capacity, with an additional five million mt being added in the second phase. Five million mt of Rizhao Steel's current capacity will be maintained and integrated into the new steel base.
Established on March 26, Shandong Iron & Steel Group has already merged with the two largest steel producers in Shandong Province, Jinan Steel and Laiwu Steel.