POSCO, South
Korea's leading steelmaker, said Monday that its China joint venture has
completed the expansion of a stainless steel plant in an effort to
effectively cater to growing demand in the world's No. 2 economy.
POSCO and China's largest private steel producer, Jiangsu Shagang Group,
set up a joint venture, Zhangjiagang Pohang Stainless Steel Co., in 1999
to operate a stainless steel plant in Jiangsu, a province on China's east
coast.
With the facility expansion, Zhangjiagang Pohang will be able to increase
its current annual production capacity of 800,000 tons of crude stainless
steel per year by 200,000 tons, POSCO said.
POSCO said the capacity expansion is in line with the company's objective
to increase its global market share in stainless steel, which refers to
steel that's resistant to corrosion and high temperature.
"The expansion will also help increase POSCO's overall annual
production of stainless steel to 3 million tons, including Zhangjiagang
Pohang's 1 million tons," POSCO said.
Spain's Acerinox Co. currently produces 3.4 million tons a year while
China's Taiyuan Iron & Steel Co. produces 3 million tons.
POSCO officials said the company aims to push up its annual sales of
stainless steel to 17 trillion won (US$15.6 billion) by 2020.
At the dedication ceremony for the expansion of the plant held in Jiangsu
earlier on Monday, POSCO CEO Chung Joon-yang said the company is
considering selling shares of Zhangjiagang Pohang in an initial public
offering (IPO) in Hong Kong or Shanghai.
"If the (joint venture) company meets the requirement of making
profits for three years in a row, it will be allowed to get listed as
early as 2014," he said. "We will re-invest in China with the
capital we raised through an IPO."
POSCO has 27 subsidiaries and has invested in 14 other firms on mainland
China, recording annual revenue of $8 billion from China.
"China is strategically important for POSCO. We will make investments
to solidify its position in China," Chung said.
The South Korean steel manufacturer holds an 82.5 percent stake in the
joint venture, while Jiangsu Shagang has a 17.5 percent stake. POSCO is
the only foreign firm operating an integrated stainless steel mill in
China that handles the entire production process from smelting iron ore to
producing finished products.
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