CHINA'S major steelmaking plants are to be refurbished in a bid to improve productivity and increase international competitiveness.
Among the 55 conglomerates picked by Beijing for the experiment that will emulate the success of the Japanese sogososha - groups like Mitsubishi - four are from the steelmaking sector.
They are Anshan Iron and Steel (Angang), Baoshan Iron and Steel (Baogang), Wuhan Iron and Steel (Wugang) and Panzhihua Iron and Steel in Sichuan - all on China's top 10 steelmaking list.
Maanshan Iron and Steel (Magang), also one of the mainland's 10 biggest steel plants, is not on the conversion list because it has changed into ownership by shareholders, becoming the first among the 10 firms to do so.
Following a joint-stock restructuring, Magang launched a $3.93 billion H-share offer in Hong Kong last year, by far the biggest by a mainland firm.
While Wugang has been chosen as one of the next batch of Chinese firms to list abroad, the other three, set for rejuvenation, have been progressing with their plans.
Baogang has set up a joint venture with Japan's Mitsubishi Heavy Industries and is negotiating more joint ventures with foreign firms, according to the China Daily Business Weekly.
The overhaul is part of a continuing effort by China to tap foreign funds to modernise existing steel plants to raise production capacity in the wake of soaring demand.
Now the world's third biggest steelmaking country, China's total steel output reached 80.9 million tonnes in 1992.
Topping the list of the 10 biggest steel firms is Angang, which makes steel plates, section steel, heavy rails and seamless steel tubes.
A mainland sector specialist said Angang was the biggest in size, number of workers and capital investment, and had the highest output. In 1992, Angang had an output of 8.4 million tonnes.
Baogang is ranked second and Capital Iron and Steel (Shougang), third.
Baogang has the highest income per worker and the most modern plant, having begun production in the late 1970s.
Capital iron and Steel, however, is China's most lucrative steel plant, given its stretched businesses embracing trading, industry and financial services.
Shougang's tax bill was 1.54 billion yuan (about HK$1.35 billion) for the first seven months of last year, with foreign exchange earnings of US$340 million.
Its aggressive purchase of Hong Kong-listed vehicles since 1992 gave it a market capitalisation of HK$10 billion by August in terms of the companies it controlled.
Ranking fourth in the sector is Wugang, which is now China's biggest sheet and plate producer, according to the firm.
It is reportedly twice the size of Magang.
According to Wugang, it has fixed assets worth 57.8 billion yuan, 121,000 workers and a production capacity of five million tonnes of iron and steel each, as at year-end 1992.
Further down the list are Baotou Iron and Steel, Banxi Iron and Steel, Panzhihua Iron and Steel, Magang, Taiyuan Iron and Steel and Tangshan Iron and Steel.
Although Magang is small compared with the other steel giants, its listing is regarded as the most successful by a mainland firm.
The steelmaker's H-share offer in Hong Kong was subscribed 68 times, gaining enormous investor support and recommendations from brokerages.
A recent research report by HG Asia recommended the counter as a ''buy'' despite concern over the short-term health of China's steel industry.
The long-term growth outlook was good, management was sound and steel prices had stabilised at levels that would ensure continued high operating margins, HG Asia said.