STEEL trader Noble Group plans to become a steel, shipping and industrial group in China within five years. Chairman Richard Elman announced the company planned to implement vertical integration to extend its existing steel trading into shipping, ship management and industrial investments. The company plans to build up its own fleet comprising five to 10 vessels in the next three to five years. Currently, it has one ship and is in the process of buying a second. Mr Elman said each ship would cost about US$10 million (HK$7.72 million) to $15 million and the company would finance the acquisitions from internal funds and bank loans. Its products will be carried by its own ships, cutting a lot of expenses which will in turn improve its profit margins. ''It would definitely make us more competitive and put us on a different footing in the market,'' said Mr Elman. The company is also working on its investments in the steel industry and is negotiating the purchase of minority interests in two or three steel mills in China and Russia. But he declined to disclose when the negotiations would be finalised. ''Certainly, we will do something this year, but not all the deals can be completed within this short period of time,'' he said. Since all the steel mills need raw materials, they would provide a market for some of the company's products, he said. In addition, the company is looking at the possibility of expanding into new areas, such as chemical and non-ferrous industries in order to expand its product range. The China market represents 71 per cent of Noble's sales of steel products and raw materials. Despite the fact that steel prices in China have gone down between 20 and 30 per cent from their peak in June last year, Mr Elman said it would be surprising if prices deteriorated further. Last year, China imported 30 million tonnes and produced 80 million tonnes. But in the first few months of this year, it has shown a 15 per cent growth in imported steel, reflecting a growth in local consumption of steel.