Hunan Province-based Chinese steel producer Valin Steel has lately initiated a due diligence investigation within the scope of its planned merger with Lengshuijiang Steel (Lenggang). A privately-owned enterprise and the second largest steel mill in the central Chinese province of Hunan, Lenggang is controlled by Hunan Bochang Holding Group, which holds an approximate 74 percent stake in the mill.
Lenggang has a total production capacity of three million mt, which can be broken down into 1.5 million mt of rebar with the remainder consisting of other low-end construction steel products. Its output contrasts sharply with Valin Steel's focus on auto sheet, high-strength shipbuilding plate, and oil pipe.
In 2008, Valin Steel Group produced 10.83 million mt of crude steel, and posted sales revenues of RMB 70 billion ($10.25 billion) and a net profit of RMB 3.1 billion ($453.85 million).