China's Baoshan Iron & Steel has struck a 243 million yuan (HK$229 million) joint-venture agreement with the world's largest steelmaker Arcelor to produce the first domestically made laser-welded steel plates for the mainland's booming car industry. Wu Wenhua, strategic development director of the Shanghai-listed A share, said it would take a 75 per cent stake in the venture, while Luxembourg-based Arcelor would hold 25 per cent. Half of the 243 million yuan would be registered capital of the new company, he said. A plant would be built near Shanghai this year with production due to come on stream in the second half of next year. Under the agreement, Arcelor will transfer its laser-welding technology to Baosteel. The technology will help make car steel lighter, and cars more fuel-efficient. 'Currently these products are all imported,' Mr Wu said. 'By producing them domestically, our customers can save on transportation fees, import tariffs, warehousing and insurance charges.' The joint-venture plant will have an initial annual production capacity of two million units. The announcement of the tie-up came hot on the heels of Baosteel's agreement in principle last week with Japan's Nippon Steel on the establishment of a 6.5 billion yuan, 50-50 joint venture to make steel products for car factories on the mainland. Arcelor has expressed interest in investing in the joint venture by buying shares from Nippon Steel. It has also reportedly been invited by Baoshan's parent Baosteel Group to invest in a proposed US$8 billion joint-venture plant in Brazil with Companhia Vale do Rio Doce. The plant would be able to make three million tonnes of rolled steel a year.