Steel giant phasing out Guangzhou production

PUBLISHED : Wednesday, 12 May, 2010, 12:00am
UPDATED : Wednesday, 12 May, 2010, 12:00am

Guangdong's steel giant is shifting its 15 million tonnes a year operation out of Guangzhou to an industrial hub 400 kilometres away.

The 35 billion yuan (HK$39.8 billion) move by the Guangdong Iron and Steel Group is seen as part of the company's long-awaited restructuring, while at the same time helping the environment.

In a joint briefing with the Development and Reform Commission of Guangdong, commission chairman Li Miaojuan said the group would adopt more environment-friendly steel production.

It will phase out its 15 million tonnes of annual steel production and instead turn out five million tonnes of fine steel in the port city of Zhanjiang, western Guangdong, in a bid to meet the province's demand for high-end products, Li said.

Zhanjiang's Donghai Island has one of the best harbours in the country and could become a base for giant iron, steel and petrochemical plants.

Li said the move was necessary and urgent as the group's production hub in Guangzhou had been putting tremendous pressure on the city's effort to protect the environment.

It was also critical for the integration of Guangzhou and Foshan cities as well as in preparing for the upcoming Asian Games. The Southern Metropolis News reported that the move from Guangzhou could cut down the use of 2 million tonnes of standard coal, 21 million tonnes of water and dust emission of 40,000 tonnes.

Meanwhile, China's steel industry is ripe for consolidation in the coming years, the head of ArcelorMittal, the world's largest steelmaker, said yesterday.

Lakshmi Mittal told the company's annual shareholders meeting: 'Outside China the steel industry is well consolidated,' adding that he believed China, the world's largest producer, would have companies making an annual 50 to 70 million tonnes in four to five years.

Steeled for growth

Guangdong Iron's 35 billion yuan move is part of its restructuring

The group's planned project in the port city of Zhanjiang will have a fine-steel capacity of, in tonnes: 5m